All Forum Posts by: Daniel Kidd

@Timothy M. I found some time and just uploaded some pictures of the calculator I ran. I rounded a few numbers to make it a bit prettier.

@Timothy M. The way I meant that was that it was listed at 110K and I was able to get it at 105K. I actually bought it at 95K but added in some of the light rehab and closing costs for a truer value of 105K that I paid into the property. I have been meaning to work this one up on a BP calculator and attach the PDF to give a better overview of everything but have yet to do so. I will hit you up when I get to it. 

@David Collier Jr For the IRA portion I pulled everything out of the Roth instead of doing a self directed one. This was mainly because I wanted to hold it in an LLC, and knew too little at the time to know if I would be able to quit claim it over after the fact if I held it that way. Anyway all of that to say that I was looking to keep it as straight forward as possible so I wouldn't have to change anything after the fact.

The tax penalties were straight forward in that I only had to pay taxes on the portion of the Roth that was not an original contribution. In this instance it was about 7K that was not a contribution so I had to pay about 2K in taxes when it was time to do that. There were no fees or early withdrawal penalties with this, but it was through USAA so I do not know if this would hold true for everyone else. 

@Dominic Franco I see, I'll have to adjust how I word that in the additional provisions in the future to make sure we don't hit that again.  

@Cooper Marcus No problem, glad you enjoyed it. If you have any questions about it feel free to ask. 

@Dominic Franco Dude sweet write up, I was just talking to Jess and it sounds like y'all are renting the highest in the neighborhood. Was the pet deposit non-refundable because the 12 months had passed or would it not have mattered even if it was still in the middle of the lease?

@Michael Volek The concessions were all for repairs for issues found during the inspection. Essentially I asked for everything to be fixed or for them to give 42K in concessions and they came back closer to 30K in concessions. Be sure that you know how to word a contract if you are going to try to get this much in concessions. Feel free to send me a message if you would like to know more about that. 

@Justin Tahilramani I considered it, but it would just be a reason for me to not want to do a STR I think. I like not worrying about it at all. Although I will say that if I make anymore STR then I will like use SFH instead of MFH. I haven't had many issues, but there have been a few instances where the STR occupants have been a nuisance to my LTR in the quad. Also I am about to close on 13 more units this month, so taking time to manage one AirBnB just wouldn't be in the cards for me.

That is awesome though. Which part of town is your quad in and do you live here in Fayetteville? 

Investment Info:

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

Purchase price: $105,000
Cash invested: $27,500
Sale price: $110,000

This was the start for me. I had two more properties to close on later this day as well. It was just a simple turn key duplex that I found on the MLS with the help of my awesome agent. There wasn't anything special about it at the time, but it is now one of my higher producing assets as far as CoC ROI. When I originally purchased this with my brother it was functioning just around the 1% rule, but it has quickly gone up to about a 1.4 in the six months after purchasing it.

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

I was actually looking at a bit of everything at the time and was actually under contract for a SFH as well as this one when the offer was accepted. I didn't like the SFH home itself or the neighborhood much and let that one go and focused on this one. The good thing about this deal was that the seller was ready to let it go and agreed to all of the requests to fix all of the little things on the inspection prior to closing. Everything just came together nicely

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

This was a deal that came up on the MLS and I jumped right on it. The negotiating part wasn't really all that hard. Like I said before, he was pretty motivated and I only asked for things that came up in the inspection. He even gave me half of the cost of the roof since it was 15 years old. I used this money to put gutters on. Apparently no one in NC uses gutters..

How did you finance this deal?

This deal was also part of the Roth IRA money that I pulled out. I also partnered with my brother in order to have enough to close one some other properties later in the day. This was a conventional finance with 25% down at about a 5.7% rate on 30 years.

How did you add value to the deal?

There really wasn't all that much to do even if I had wanted to do something, but I added gutters and fixed some of the landscaping issues that were going on with the place. A few things have broken here and there, but for the most part this has been a headache free investment. I have also been able to up the rents by about $200/door over the last 6 months. Fayetteville area rents have taken off in a good way. I wish I had bought every duplex last summer.

What was the outcome?

The outcome so far has been great. No huge appliances breaking or anything like that. One tenant did leave after the rent went up but we had no issues getting a new one in there ASAP. The property was a bit disappointing at first with only about $100 in cash flow a month but after the rent bumps it is closer to $500 now.

Lessons learned? Challenges?

I am just glad that I took the steps to get started. This deal did not look like a home run at all as I was going into it, but I knew I needed to get started and that I could make it work. I wish that I could have predicted how high the rents would go because I would have begged for money eight months ago to buy every 100K duplex on the market. You cant get one now for less than $150K since rents went up to about $750/door for a 2bed 2bath.

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

Shelby Osborne - Agent - Team Lead for Five Pillars Realty
Patrick Stoy - MC Mortgage
Stephanie Foley - Insurance
Jennifer Kirby Fincher - Closing attorney
Gil Jacobs - Property Manager - Alotta Properties

Investment Info:

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

Purchase price: $105,000
Cash invested: $27,500
Sale price: $110,000

This was the start for me. I had two more properties to close on later this day but this was the first one for me. It was just a simple turn key duplex that I found on the MLS with the help of my awesome agent. There wasn't anything special about it at the time, but it is now one of my higher producing assets as far as CoC ROI. When I originally purchased this with my brother it was functioning just around the 1% rule, but it has quickly gone up to about a 1.4 in the six months after purchasing it.

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

I was actually looking at a bit of everything at the time and was actually under contract for a SFH as well as this one when the offer was accepted. I didn't like the SFH home itself or the neighborhood much and let that one go and focused on this one. The good thing about this deal was that the seller was ready to let it go and agreed to all of the requests to fix all of the little things on the inspection prior to closing. Everything just came together nicely

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

This was a deal that came up on the MLS and I jumped right on it. The negotiating part wasn't really all that hard. Like I said before, he was pretty motivated and I only asked for things that came up in the inspection. He even gave me half of the cost of the roof since it was 15 years old. I used this money to put gutters on. Apparently no one in NC uses gutters..

How did you finance this deal?

This deal was also part of the Roth IRA money that I pulled out. I also partnered with my brother in order to have enough to close one some other properties later in the day. This was a conventional finance with 25% down at about a 5.7% rate on 30 years.

How did you add value to the deal?

There really wasn't all that much to do even if I had wanted to do something, but I added gutters and fixed some of the landscaping issues that were going on with the place. A few things have broken here and there, but for the most part this has been a headache free investment. I have also been able to up the rents by about $200/door over the last 6 months. Fayetteville area rents have taken off in a good way. I wish I had bought every duplex last summer.

What was the outcome?

The outcome so far has been great. No huge appliances breaking or anything like that. One tenant did leave after the rent went up but we had no issues getting a new one in there ASAP. The property was a bit disappointing at first with only about $100 in cash flow a month but after the rent bumps it is closer to $500 now.

Lessons learned? Challenges?

I am just glad that I took the steps to get started. This deal did not look like a home run at all as I was going into it, but I knew I needed to get started and that I could make it work. I wish that I could have predicted how high the rents would go because I would have begged for money eight months ago to buy every 100K duplex on the market. You cant get one now for less than $150K since rents went up to about $750/door for a 2bed 2bath.

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

Shelby Osborne - Agent - Team Lead for Five Pillars Realty
Patrick Stoy - MC Mortgage
Stephanie Foley - Insurance
Jennifer Kirby Fincher - Closing attorney
Gil Jacobs - Property Manager - Alotta Properties