All Forum Posts by: Carl Simon

Thank you @Larry Turowski! Appreciate the note and advice. 

Hello,

Seeking advice and input from the BP community here on what path to go down. We are under contract to purchase a new primary home which we found off market at a great discount. It is right down the street from us, and was a college house and we are willing to clean it out and throw away all the furniture for an owner living an hour + away.  The neighborhood is great, one of the best school districts in New York (Pittsford, NY).  After we fix it up with about $10-15K + sweat equity we think it could has as much as $100K in equity.  

Our options now fall in two general categories. Without going into too much details it seems we now have to choose one of two paths:

-  "Delayed gratification" Keep our primary house as a rental. It would not have huge cash flow (~$300) but is in an appreciating market with very very low inventory. Farmland easements limit future development around too. 

- "Go for cash flow" Cash out now while the market is on a high after a huge appreciation year. Avoid short term capital gain as we lived in our current house 3 years. Seek to translate returns on the sale (~$100K) into stronger cash flowing assets in small mutli-family. We do have experience buying small multi units (3) about an hour away, but now with interest rates higher it seems like cash flow overall will be less. 

Thank you for any thoughts and feedback! I'd love to know what you would consider the best path.   Also, what questions am I missing, and what factors are most important?

-Carl 

Thank you Dave for the reply!

This sounds good and focusing in on using a heloc on my primary residence sounds good. We have untapped equity here literally under our feet. I may just have to replace out 1970s countertops before the appraisal :)

With a lot of us having refinanced into low rates the last two years, or bought the Covid dip with low rates, it is going to be interesting to see financing how financing strategies will changes with rising rates now going forward. Any overall thoughts or strategy guidance is appreciated!

Hello, 

I am seeking advice and guidance on what criteria to use when refinancing an existing rental buy-and hold. I am seeking to graduate from the beginner level and start to pull money out of our current 6 property portfolio to keep growing using the velocity of money concept.  What factors to others use when deciding which properties to seek refinancing on:

- Equity in the property (more the better)

- Interest rate (higher than less of a loss to refinance)  

- Years left on loan (longer the better since we are re-starting the clock)

Or am I going about this wrong and should seek a portfolio loan across all of our properties? 

Thank you, I am eager to hear how others go about deciding which property to refinance and when, and what factors are the most important to this decision making process!

- Carl 

Investment Info:

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

Purchase price: $160,000
Cash invested: $50,000

A side-by-side duplex in Batavia, NY. Very well maintained house with a new roof, but with some needed updates to modernize it. The previous owners had rented it as basically a shell. I wanted to add value by offering a higher quality product for renters willing to pay a higher rent as well.

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

The layout of the side-by-side, meaning you don't have noise above or below you and can use financing for basically 2 houses in 1. Utilities were already fully split. The location is also in a good part of town next to a major employer in a hospital and near parks and schools.

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

This was a negotiation that took place with the seller over 5-6 months. He is an older Italian-American looking to retire so we had to get to know each other and build trust and respect.

How did you finance this deal?

Conventional financing

How did you add value to the deal?

Modernized the house a bit by making it more attractive to tenants, and not just a shell. I painted some rooms, added appliances, and effectively marketed and screened tenants (in the winter).

What was the outcome?

Rented both sides of the duplex to one family. The mom and younger kids on one side, with the college-aged daughter on the other side as a starter apartment living next door. The total rent was a bit under the total market of renting both sides independently, but I figure it is a lower risk path to avoid any neighbor disputes. Plus, we spoke about taking care of the property with pride.

Lessons learned? Challenges?

Treat sellers with respect, don't over-improve the house in a middle-class neighborhood, and work with rental applicants to find the "win-win".

Investment Info:

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

Purchase price: $160,000
Cash invested: $50,000

A side-by-side duplex in Batavia, NY. Very well maintained house with a new roof, but with some needed updates to modernize it. The previous owners had rented it as basically a shell. I wanted to add value by offering a higher quality product for renters willing to pay a higher rent as well.

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

The layout of the side-by-side, meaning you don't have noise above or below you and can use financing for basically 2 houses in 1. Utilities were already fully split. The location is also in a good part of town next to a major employer in a hospital and near parks and schools.

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

This was a negotiation that took place with the seller over 5-6 months. He is an older Italian-American looking to retire so we had to get to know each other and build trust and respect.

How did you finance this deal?

Conventional financing

How did you add value to the deal?

Modernized the house a bit by making it more attractive to tenants, and not just a shell. I painted some rooms, added appliances, and effectively marketed and screened tenants (in the winter).

What was the outcome?

Rented both sides of the duplex to one family. The mom and younger kids on one side, with the college-aged daughter on the other side as a starter apartment living next door. The total rent was a bit under the total market of renting both sides independently, but I figure it is a lower risk path to avoid any neighbor disputes. Plus, we spoke about taking care of the property with pride.

Lessons learned? Challenges?

Treat sellers with respect, don't over-improve the house in a middle-class neighborhood, and work with rental applicants to find the "win-win".

Hi Nate, I am wondering if anyone ever responded here with any quotes or if you did it what the actual cost was? I am thinking of planning to do the same and would love to find out for planning purposes!

Count me in for future meetings!

Great post and inspirational journey. Also wanted to mention that I thought your podcast was THE BEST!  It was refreshing to hear of a successful investor who targets quality A neighborhoods, as this is my strategy starting out as well.