All Forum Posts by: Dan Chipps

Good Day Bigger Pockets members. 

"My Investment Real-estate History " 

1. My first project was a single family home that I purchased FHA 5% down at $238k.

    1180sqft  3bed 1bath in Puyallup Washington.  

    I did full renovation my self in a 2 year turn around. Sold the property for $425k and walked away with $176k.

2. Next bought a owner occupied 3plex 0% down VA loan at $520k.

    3340sqft 3xunits with 3x car attached garage - 2 bed 1 bath per unit in Tacoma Washington.

    I renovated each unit my self and moved rent from $990 ---> $1,750 per unit once I moved out after 21 months. 

    I just finished renovating it to a Quad-plex adding a 1x bed 1x bath 1x car attached garage 640sqft 4th unit at $1,400.

    I still own this property and hold a 2.6% 30 year fixed. My cashflow on this property is $3,830 and my new appraisal value is $995,000 = Equity built in 2 years $497,000

Obviously I'm leaving a lot out and will answer any questions about these 2 projects and will be adding pictures from these projects too.

My new current project is a 0% down VA new construction owner occupied quad-plex build

This will be my first new construction.  I have found some ways that I can lower the cost and the build time and the full scope cost of this project too.

1. Modular pre build framing - Im having the 4plex walls and trusses prebuild and shipped to site to have the building constructed and craned in to place in to place in 1-2 days with riggers. 

2. I am a offerup & craigslist shopper for New in the box products that I know I will be using for the build.  I currently have enough Vynal flooring, Roofing shingles, appliances, electrical items for the whole 4plex build.  

3. Self perform -  Flooring, drywall, muddling, texturing, painting, molding, and general labor for the project.  I am currently accounting for supplying $84k worth of materials and labor for this project.

I will outline what I'm planning on cost -

land -  Needs to be 9800sqft lot or larger for a quad-plex  90k-125k

Quoted for Modular pre-built framing including architectural design, Engineering, blue prints, framing and trusses = 242k

Permitting - $12,750

Roofing - $9,800

Siding - $16,000

quarts tops kitchen & bathrooms - $9,400

Windows - $9,400

--------------I will continue to update prices as I get quotes. I'm still waiting on the receiving at least 3 quotes for all the rest of the build before I average out -------------

With my VA loan there is no funding fees so it will drop the price another $16,984 on the back end.

I'm calculating the build will total $765k-$780k high end.  The comps in my area for a new quadplex 820sqft 2xbed 1x bath per unit with a $1750rpm = $1.015m eval.

My monthly payment at a %5.1 rate is around $4,950 monthly (I'm using this rate for the end financing once I refinance out of a VA loan). Add in management and Cap X and I'm at $5,800 monthly (I do my own loan care)

Currently I'm looking at a $1100-1200 monthly cashflow with an sweat equity of 220-250k. 

My questions. 

1. First any advice on new builds would be greatly appreciated and I love constructive criticism.  

2. I'm looking for a software program that will help me with my cost Performa, and scheduling.   

3. Land prep. I have never prepped a virgin parcel of land for a build. Any help in this area would be greatly appreciated. 

I will be adding pictures later today from my previous renos. 

In order to understand my planned you will have to read the initial post.

I'm eligible for my VA loan from due to my prior service

I have never purchased a home so I am eligible for my first time home buyer too.

These are the five steps that I'm following in order to acquire three 4 Plex's in under 20 months.

1. Find and buy my first 4 Plex in the Puyallup area using House Hacking strategy for 0 down VA loan and live in one of the 4 units.

2. I have the job offer from a new company starting in April that is 1h 35m away from my current position. It is a $10,000 raise but significantly further than my current job. Due to this I have learn about the VA "entitlement" rules allowing you to utilize a VA loan 2 times at once for a 2nd 0 down purchase. (There has to be just cause such at new orders, significant job millage change Ect. and I understand there is an allotted amount of $ from the VA for this type of deal)

I've called around and talk to 3 mortgage companies to get their opinion and all agree that this should be an easy sale to their underwriters due to the three hours a day driving change.

3. Find a second four Plex in the Bremerton area and rinse & repeat step one wile renting out all 4 units of the first four Plex and living in 1 unit in the 2nd newly acquired 4 plex.

4. Once I have both of the 4 Plex's in my name my parents are doing a quick claim name change on the SFH that I initially invested in. The house I'm currently living has 154k equity. This is key for my 3rd 4 plex purchase.

5. I will have to let my current house season for six months before I'm eligible to take out the equity in order to purchase the third four Plex with a 70% equity pull. I'm estimating I will have to save $10-$25k on top of the equity in order to purchase this third 4 plex.

There is a lot of other little steps in between the 5 step goals. I also understand that it's not as easy as step 12345. But with being said this is the reason that I am here looking for other successful landlord, lenders, and agents for advice. Education is the key in this new field that I'm excited to get into.

Things I have done to prepare for this this investment journey.

Paid off all my debts raising my Credit score to 762.

Paid of my car loan so my only out going expenses are utilities, phone, and buying my fiance sexy outfits :P

Acquired a $71,000y 5y contracted salary paying DOD job.

Never had any financial issues.

I've purchased almost every single landlord, real estate multi unit investment book in the audible library lol...... And this is where I have ended up :)

I'm here writing this post because I'm reaching out to successful, short-term and long-term property owners for advice, criticism, tips or help of anyway for my plan.

First the property was rezoned in to wetlands due to the freeway being 300ft away and the water run off, The slab in the back was originally a large enclosed kennels for breeding dogs. When I went to get permits for making it in to an addition on to the house the city they looked up the over head views for the last 8 years. Ofcorse it got denied due to the new wetland zoning of the lot. But after some research I found that I could utilize the slab along as I joined the roofs in to a ma and pa unit. The issue was  the slab it self. As started in the post I "fixed" the slab :) and now just finished the Engineering plans for a 672ft addition. To utilize the full slab including making a "Loft" second floor with Vaulted Celings for the extra square footage. When I had septic services come out and pump the septic and get a passing review to buy the property, they enlightened me that there was a 2nd 500 gallon septic tank. WEW! Once I found this out all systems go! I poured a patio and sidewalks around the house and leading to the ma and pa unit, The slab is 9ft from the existing house. This is the first one that I used in order to build the equity that I want the house to eventually have. 

Will be making a new thread to explain my so called "Crazy amazing idea" of turning this SFR investment in to three 4x plex's with in 20 months!

I will update with link where once it is done

Investment Info:

Single-family residence buy & hold investment in Puyallup.

Purchase price: $146,000
Cash invested: $37,000

Parents gave us kids money to go to college, I knew I was joining the military so I had them buy a SFH Rental wile i was in-training.
They bought a house that has a Kitchen / Attic fire for 146k.

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

I grew up working and repairing my parents rentals in Puyallup WA. They owned 3x Duplex's. We learned learn first had what you where able to accomplish by investing smart and for long term. I knew that if I was to put the money to work that when I got out I would be able to build my dream home with the growing Equity that I reinvested back in to the house.

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

Parents found it wile I was stationed in Coronado CA. I didn't even see the houses until I was fully discharged with honer and found my self moving in. :)

How did you finance this deal?

Cash down mortgage.

How did you add value to the deal?

16x28 slab in the back of the property that I "Fixed" now its a 8 inch monolithic slab with rebar and 1/8th inch wire for a foundation for a Attachable ma and pa unit.
Built new trusses inside the roof up to code to sure up the old slightly burnt ones.
Re roofed it including new osb.
Resided the whole house
Installed a new incert propane fire place,
Removed the old laminate shower unit and tiled the bathroom, new vanity
Hardwood floors
Led lighting all over
Painted whole house

What was the outcome?

House was appraised at 289k with a sale price to match my area of 310k

Lessons learned? Challenges?

RESEARCH
RESEARCH
RESEARCH
UTILIZE LEGAL LOOP HOLES
RESEARCH
RESEARCH
Ect.

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

No. This is the house I am living in. My goal was to turned in it to my equity machine that is going to jump start my Buy & Hold startup, leading in to Trade up scenarios!

Investment Info:

Single-family residence buy & hold investment in Puyallup.

Purchase price: $123,700
Cash invested: $37,000

Parents gave us kids money to go to college, I knew I was joining the military so I had them buy a SFH Rental wile i was in-training.
They bought a house that has a Kitchen / Attic fire for 146k.

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

I grew up working and repairing rentals my parents owned in Puyallup WA. They owned 3 Duplex's and i got to learn first had what you where able to accomplish buy smart real estate investing. I knew that if I was to put the money my parents put aside for my to work that when I got out I would be able to build my dream home with the growing Equity that i forced back in to the house.

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

Parents found it wile I was stationed in Coronado CA. I didn't even see the houses until I was fully discharged with honer and found my self moving in. :)

How did you finance this deal?

Cash down mortgage.

How did you add value to the deal?

16x28 slab in the back of the property that I "Fixed" now its a 8 inch monolithic slab with rebar and 1/8th inch wire for a foundation for a Attachable ma and pa unit.
Built new trusses inside the roof up to code to sure up the old slightly burnt ones.
Re roofed it including new osb.
Resided the whole house
Installed a new incert propane fire place,
Removed the old laminate shower unit and tiled the bathroom, new vanity
Hardwood floors
Led lighting all over
Painted whole house
Ect....

What was the outcome?

House was appraised at 289k with a sale price to match my area of 310k

Lessons learned? Challenges?

RESEARCH
RESEARCH
RESEARCH
UTILIZ LEGAL LOOP HOLES
RESEARCH
RESEARCH
Ect.

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

No. This is the house I am living in. My goal was to turned in it to my equity machine that is going to jump start my Buy & Hold startup, leading in to Trade up scenarios!

Investment Info:

Single-family residence buy & hold investment in Puyallup.

Purchase price: $123,700
Cash invested: $37,000

This is a rambler that my parents bought, There was a fire in the kitchen and fire damage in the roof. My parents put aside money for all 3 of us kids so that we could go to college. Instead of going to college I joined the military and had my parents invest the money in a rental close to their main residence. They took care of it for me wile I was gone for 5 1/2 years. I have scene been living in the house and paying my parent rent due to not wanting to own the mortgage in my name. That's about to change :)

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

I grew up working and repairing rentals my parents owned in Puyallup WA. They owned 3 Duplex's and i got to learn first had what you where able to accomplish buy smart real estate investing. I knew that if I was to put the money my parents put aside for my to work that when I got out I would be able to build my dream home with the growing Equity that i forced back in to the house.

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

Parents found it wile I was stationed in Coronado CA. I didn't even see the houses until I was fully discharged with honer and found my self moving in. :)

How did you finance this deal?

Cash down mortgage.

How did you add value to the deal?

16x28 slab in the back of the property that I "Fixed" now its a 8 inch monolithic slab with rebar and 1/8th inch wire for a foundation for a Attachable ma and pa unit.
Built new trusses inside the roof up to code to sure up the old slightly burnt ones.
Re roofed it including new osb.
Resided the whole house
Installed a new incert propane fire place,
Removed the old laminate shower unit and tiled the bathroom, new vanity
Hardwood floors
Led lighting all over
Painted whole house
Ect....

What was the outcome?

House was appraised at 289k with a sale price to match my area of 310k

Lessons learned? Challenges?

RESEARCH
RESEARCH
RESEARCH
UTILIZ LEGAL LOOP HOLES
RESEARCH
RESEARCH
Ect.

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

No. This is the house I am living in. My goal was to turned in it to my equity machine that is going to jump start my Buy & Hold startup, leading in to Trade up scenarios!