All Forum Posts by: Corey Louton

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Rochester.

Purchase price: $135,000
Cash invested: $24,000

Picked up this triplex with a 1031 exchange, property is at 100% economic occupancy, bringing in $2200 a month in rents. The property needed some TLC to bring it back to life, but we have a good team that is doing just that.

How did you find this deal and how did you negotiate it?

Found it on mls first day it was listed. Owner had just passed away and their estate was selling it at bargain pricing. To be competitive we waived inspection contingencies, offered $10k more than asking and negotiated certain repairs to be done following closing to follow local code enforcement.

How did you finance this deal?

We used Civic Financial services, a private lending firm for the debt. The down payment came from a 1031 exchange.

How did you add value to the deal?

Immediately raised rents by $50 each unit and transferred utilities into the tenants names. We utilized the money from negotiated repairs to increase the value of the property as well.

What was the outcome?

Repairs are still being completed as the list was lengthy, but all tenants are happy with the repairs being done and are enjoying the new management.

Lessons learned? Challenges?

Looking for a replacement property during a 1031 exchange the current market was especially challenging. 45 days sounds like plenty but it went fast and we went under contract 3 days before the expiration of the 45 day period.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Worked with Dave Foster and his team at Exchange Resource Group. They are a team of true professionals and I won’t hesitate to call on them next time I have a 1031.

@Ryan Copeland

Hi Ryan, your deal looks good on the calculator analysis number wise. What class property/neighborhood is this in? That will have significant impact on tenant quality and duration. I have a couple duplexes in lower income areas and the turnover is more often than I would like, but that was a risk I was willing to take when I invested in that area. 

You will always have reservations and hesitation on your investments, however more so on your first deal. Look objectively at your risk/reward and your long term goals then make your decision then see it through. You just have to pull the trigger to get started.

There are 2 great quotes from athletes that I regularly tell myself when I am on the fence; “you will miss 100% of the shots you don’t take” - Wayne Gretzky and “everyone has a plan until they get punched in the mouth” - Mike Tyson

Apply where necessary.

Hope this helps, best of luck.

Corey

Would love to attend, however I will be traveling out of town for work the second half of the month. Please let me know if you are planning anything in February, thanks!

Thank you @Tim McKelvey. There is about $3-4K worth of work to go into the property which isn’t bad at all. The property values are pretty low in this area, but vacancy numbers are down. My vacant unit on this property just had a deposit put on it today. And I agree 100%, property managers can be game changers. 

@Corey Martin welcome to BP and your new journey in life! I am located in Fredericksburg just right up the road from you. Stick to it, read everything you can get your hands on, and listen to as many podcasts as you can that apply to your investment strategy. Good luck and reach out if you need anything.

Corey

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Newport News.

Purchase price: $48,000
Cash invested: $700

Contributors:
Lakesha Kirkendall

Small duplex (2 bed / 1 bath each unit). There is room for forced appreciation with multiple areas for improvement. Current rent is $650 each unit, one unit is rented and the other is in between tenants. Advertised price was $57000, after inspections and negotiations final agreed price was $48000.
Found this off market deal through my property manager; Desirable Management in Hampton, VA.

How did you find this deal and how did you negotiate it?

Found it through my property manager; negotiated the price during due diligence after inspections.

How did you finance this deal?

Private money investor

How did you add value to the deal?

in progress

Lessons learned? Challenges?

Ensure private money lender is aware of the procedures and limitations in wiring funds from their bank.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Lakesha Kirkendall

@Rob Lee, yes I did. I have a couple options for you depending on what you need done and the extent of the work. Terrance Jackson with Pinnacle Development is an outstanding GC, but primarily focuses on full flips, rebuild, and new builds. Send me a message if you have more questions or if you want his contact info.

Thank you. First off, this is a low income housing area and my first experience in this market. I leaned heavily on my property manager when it came to marketing the property (I interviewed 4 or 5 before finding her). I ended up spending a pretty penny on plaster work for the downstairs when drywall and paint would have been just fine; this cost me an extra $2200 or so (this is where my contractor and realtor recommended the plaster and my prop mngr didn’t). 

Numbers:

Asking $57k -> purchase $40k

$18k in repairs 

Rent: $700/$650 ($1350 total)

3%vacancy 10%prop management 5% capex & repairs 

Property taxes $69.08 / Insurance $135

Cash flow $435

Planning to BRRRR this property in order to scale

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Newport News.

Purchase price: $40,000
Cash invested: $18,000

Duplex that required a moderate renovation.

What made you interested in investing in this type of deal?

It was multi family, in my price range, and I needed to move past the analysis paralysis.

How did you find this deal and how did you negotiate it?

Found it on Zillow, offered $50k and was accepted. After property inspections were completed I negotiated the price down to $40k due to required repairs.

How did you finance this deal?

Used private money to make the purchase; taking a loan of $50k amortized over 30 years @ 5% with the note due at 5 years.

How did you add value to the deal?

Leveled the downstairs kitchen, replaced all cabinets and countertops, painted both units.

What was the outcome?

Both units are currently rented with positive cash flow. My property manager has been a huge help in my success so far.

Lessons learned? Challenges?

Lots....what is required vs what would be nice when you’re on a budget is huge. Listen to your team when making renovations.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Lakesha Kirkendall with Desirable Management, LLC in the Norfolk area is fantastic. She knows the market and has a large network of professionals.

Can anyone provide recommendations for a general contractor in the Norfolk VA area? Looking to renovate a two bedroom one bath 800 square-foot apartment. Any assistance would be greatly appreciated. Corey