All Forum Posts by: Darren Bloomfield

Just finished BRRRR by @David Greene !!! Fantastic book and really changed the way I will think about scaling my portfolio.

75% LTV refinance was mentioned a lot and I am wondering if this is because a 25% downpayment would have to be left as equity in the property for an investor loan. What if I wanted to rehab the property and then move in as a owner occupier? Could I leave 5% for a conventional loan and then pull out 95% on the Refi because its my primary residence?

I am fortunate to be in a position with my current house hack where I am able to put on my tenant hat and think about what improvements would make my two units appeal to a larger tenant pool at a higher rent rate when the time comes to move out.

A project i have been thinking about is adding central AC and splitting out the heat/ gas bill. 

My current set up:

(1) Furnace (in unfinished basement) with shared duct work to both units 

(1) Water heater in basement used for both units

(2) separate electrical boxes for each unit

Heat/ gas bill shared 

Separate Cooking oil/ stove bill for 2nd floor

No AC

The thermostat / temperature control is only in the 1st unit so all the 2nd floor can do is open/ close its duct work

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Seems like I have three options that i can think of. All varying levels of upfront cost

(1) - Add furnace/ tankless water heater to 2nd floor. Duct work running through out the unit. Put in AC for this unit. Cap ducts leading the the 2nd floor from basement furnace

Add separate AC for first unit

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(2) Add around three duckless mini-splits (Heat & AC) to the 2nd floor (maybe do the water heater or just leave it shared) 

Add AC to first floor. Cap ducts to 2nd floor

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(3) Add AC to existing furnace in basement which would cool both units

     Now I'd have to figure out how to charge for the electrical bills now as the AC would hook up to one electrical box but be used by both units. 

Still does not solve the temperature control issue

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I know that some landlords do a utility fee monthly separate from the rent. My current tenants on the first floor did not want to do a set fee each month so they are paying me 2/3's of the shared gas/heat bill each month via venmo

I think this venmo process would be come more difficult once I was not living in the property/ scaled to the point where I was using a PM. 

I have meet with a few HVAC Contractors and am gathering information/ bids.

I want to raise my properties value and the market rent with the most efficiency of cost to do so. i also want to reduce/ eliminate potiental headaches in the future/ make my system easy for a property manager to follow when that time comes.

What are your tips? 

Investment Info:

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

Purchase price: $489,000
Cash invested: $25,000

Renting the first unit to tenants. Living on the second floor and running a STR out of a spare bedroom. House hacking

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

Great location. FHA loan has a low downpayment which allowed me to get into the property and start building equity.

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

Zillow/ MLS

How did you finance this deal?

3.5% down FHA

How did you add value to the deal?

Rehabbed bathroom. Fresh paint. Cosmetic upgrades outside. Saving for a kitchen/bathroom rehab on my unit when moving out after 1 year.

;t=3s

I am looking for some support as I've been feeling a-little antsy lately and some what detached. I've caught a bug... the real estate investing bug that is. I closed on my duplex end of September 2022 with a 3.5% down FHA loan in fast appreciating Logan Sq/ Avondale area. . It took me around a month to rehab and I signed my annual term tenant Nov 2022. The property is two units of 2 bed/ 1 bath's. I am living in the top unit and am renting the other unit for $2,100/ mo. My mortgage (PMI/ taxes/ insurance) is $3,412/mo & a water bill of $218/mo. So essential I am paying $1,530/mo in "rent" to myself. When I move out, I think I'm on track to get at least $1,750/mo (and even more cash flow once I hit 20% and I refinance out of my PMI).

SO WHAT'S THE PROBLEM? 

What do I do next? The obvious answer is to scale. As I said, I've caught the bug. I have time, but now I no longer have liquid capital. I don't have enough "lendable equity" in my property for a HELCO. What do I have? Time, drive, and knowledge. I think one of the most important muscles for a new real estate investor to develop is the ability to ask the right questions. The right questions usual are the ones that you don't have the answer to right away. They are the ones that stir in your brain until you find the answer. 

The main questions that have been on my mind is "where will my next property be?" and "How will I afford it?"

If anyone is looking for an operator to find/ manage a deal, I'm looking for a money partner to team up with in Chicago. I am interesting in a cash flow/ equity split. I have relationships with inspectors/ general contractors/ lawyers/ accountants/ mortgage lenders and most importantly an investor friendly agent! Help me, help you.