All Forum Posts by: Dan V.

@Reynaldo Ramirez Welcome to the REI world! I am also from Hampton Roads area. I've been learning real estate investing for 2 years when I finally decided to jump in the water in 2020, right before COVID started. I started flipping houses and used the profit to build a rental portfolio. Happy to chat if you have any questions or want to talk REI in general.

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $540,000
Cash invested: $50,000

6-unit apartment building

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

3 units were rehabbed and 3 units are under market but needs some work, potential to add value.

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

Sent by wholesaler, listed in MLS. Worked directly with seller so we're able to get it below asking.

How did you finance this deal?

Brought in new partner to split with the downpayment, then used commercial loan

How did you add value to the deal?

Will rehab the 3 under-market units then rent it at market rate. Will also bill back water/sewer to improve the bottom line.

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

Used closing attorney and a local lender that we have existing relationship.

 Thank you for the input!

Has anybody had experience converting a home into an assisted living facility? We are thinking of buying a 2500 sq ft SFH and extending it to 4,500 sq ft (from 6bed/3bath to 14bed/7bath). We have an operator willing to lease it and also buy it after 5 years. The property is zone R4 which permits assisted living facility.

1. From the appraiser's standpoint, how is it going to be appraised (sales comp, income approach, cap rate, etc) once it's converted to the proposed plan? Will the lease be considered in the appraisal?

2. I'm thinking of incorporating the layout design where it can easily be converted into multifamily. I'm just thinking of an alternative strategy in case things didn't work out with the operator. I don't want to get stuck with 14/7 house. LOL

3. What's the average rent rate per room for this facility?

4. Thoughts on the number below?

PP - $200K

Rehab - $300K

Monthly rent - $6500 (not sure yet)

Any thoughts, tips, or suggestions? 

Looking for recommendation of lender for a property in Petersburg, VA. Property will be bought thru an LLC so preferably a commercial lender or investor friendly lender. Thank you!

@Lee Gilroy Congratulations! It's definitely harder to find lender for smaller parks but we have more luck using local banks or credit unions.

Back of the napkin analysis, Monthly Lot Rent (actual) x 60% x 12 / 10% = Current value of the park. 

Market cap rate depends on the age, location, and condition of the park. When we have our park appraised, the appraiser used 9% cap  while the park next to us which is much nicer is about 6% cap. And with the interest rate going up, in order to get a good cash flow you need to have enough spread between the cap rate and interest rate. With the size of the park, I would not go below 10%.

The tenant is a construction company. The other space we own was a flex space condo unit and only 3,000 sq ft. I think smaller units (under 10K sq ft) are ideal in high-traffic areas and larger ones if close to interstate highways.

The book made a huge impact on me, at least changed my mindset. If you're more of a listener than a ready like me, try getting the audiobook or search for one on youtube that you can listen to while driving or waiting and find out how it affects you. I actually bought it as a gift to my son who just turned 10, I don't think he's happy about it but I'm hoping that one day he'll read it when he's ready. 

Investment Info:

Industrial commercial investment investment.

Purchase price: $415,000
Cash invested: $48,000

8,500 square feet freestanding commercial warehouse building

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

It's right across another property that we own. Flex spaces are good investments nowadays and commercial space is easier to manage.

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

Door knocking. We made an offer more than a year ago but the seller chose to sell it to an owner-occupant with a lease option. The tenant did not exercise the lease option so we offered to buy it again and we got it.

How did you finance this deal?

Combination of bank and 2nd lien seller financing.

How did you add value to the deal?

We updated the electrical and made repairs to the building. The appraisal came back good as well so we got instant equity and bank agreed to a lower downpayment.

What was the outcome?

We raised the rent (still under the market) and kept the current tenant.

Lessons learned? Challenges?

Keep communications open and know the market. The tenant was initially opposing the increase in rent but we stuck with it since we know that the raise was reasonable and even with the new rate, it is still below the market. We also offered to make some repairs to make it more justifiable.

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

We made a direct offer and used our local real estate attorney