All Forum Posts by: Dennis Alves

Investment Info:

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

Purchase price: $379,000
Cash invested: $60,000

Two family home and I rent out the top floor unit @ $2,500 per month & I live in the first floor unit. If I were to rent out the 1st floor unit I'd get $2,000 per month with a monthly cash flow of $1700 per month. This could be higher, but I chose to refi from a 30yr rate to a 15yr rate after to get a lower interest rate and have the home paid off by the time I was 50. I've used the large amount of equity I've built in this home to help make the down payments on my other 3 investment condos.

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

It was during the low point of the market in Dec 2011 and I was eager to buy my won place and not rent. I was able to get this place at an amazing price and good rate.

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

I saw the house on the street while driving around town. I got an agent and place an offer at asking with a note from my my wife and I about this being our first home together and a promise that we'd take excellent care of the home.

How did you finance this deal?

I originally went FHA since I was putting down 16% and to get a lower rate on the mortgage. Since I was renting out one of the units I was able to right of 70% of the PMI to help off set some of this cost.

How did you add value to the deal?

Since buying the home I've put money into the house and have upgraded it most years. I recently had the home appraised and it came back with a value of $660K so the investments have really added value to the home and helped me get better rents for the units I rent out.

What was the outcome?

Considering I live in the home with my wife and son it's been a great experience. I have amazing tenants who actually help me maintain and take care of the home. I get to live for free in my own home since my tenants pay my mortgage and I've been able to see my 5 yr old son grow up in the house.

Lessons learned? Challenges?

I wish I had realized sooner that I could have used the equity I built from the home to buy other investment properties sooner. I could have purchased some great deals, but I was took focused on building up cash and never thought of using my home as the biggie bank for the down payments. It was another real estate investor that opened my eyes to this.

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

I used Sean Connelly from Remax in Marblehead as my agent and Fairway Mortgage out of Newbueryport to finance the home.

Investment Info:

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

Purchase price: $379,000
Cash invested: $60,000

This was my first purchase. It's a two family home in Salem. I currently rent out the upstairs unit for $2,500 per month and I live in the first floor unit. If I were to rent out the 1st floor unit I'd get $2,000 per month with a monthly cash flow of $1700 per month. This could be higher, but I chose to refi from a 30yr rate to a 15yr rate after to get a lower interest rate and have the home paid off by the time I was 50. I've used the large amount of equity I've built in this home to help make the down payments on my other 3 investment condos. This was the first of my investments and it's been the spring board to helping me acquire more properties.

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

It was during the low point of the market in Dec 2011 and I was eager to buy my won place and not rent. I was able to get this place at an amazing price and good rate.

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

I saw the house on the street while driving around town. I got an agent and place an offer at asking with a note from my my wife and I about this being our first home together and a promise that we'd take excellent care of the home.

How did you finance this deal?

I originally went FHA since I was putting down 16% and to get a lower rate on the mortgage. Since I was renting out one of the units I was able to right of 70% of the PMI to help off set some of this cost.

How did you add value to the deal?

Since buying the home I've put money into the house and have upgraded it most years. I recently had the home appraised and it came back with a value of $660K so the investments have really added value to the home and helped me get better rents for the units I rent out.

What was the outcome?

Considering I live in the home with my wife and son it's been a great experience. I have amazing tenants who actually help me maintain and take care of the home. I get to live for free in my own home since my tenants pay my mortgage and I've been able to see my 5 yr old son grow up in the house.

Lessons learned? Challenges?

I wish I had realized sooner that I could have used the equity I built from the home to buy other investment properties sooner. I could have purchased some great deals, but I was took focused on building up cash and never thought of using my home as the biggie bank for the down payments. It was another real estate investor that opened my eyes to this.

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

I used Sean Connelly from Remax in Marblehead as my agent and Fairway Mortgage out of Newbueryport to finance the home.

Investment Info:

Other buy & hold investment in Salem.

Purchase price: $170,000
Cash invested: $5,500

This was my 3rd investment condo that I purchased and the 2nd within this building in Salem. This unit came good to go out of the package. The only thing that I needed to do was update the vanity in the bathroom. It was a 550 sq foot studio that had recently been updated.

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

I have the ability to own up to 3 condos within this building. This unit was my 2nd purchase within this condo association/building. The unit had recently been updated so there was little to no work that I needed to do on my end. I spent $300 on a new vanity but other than that it was good to go. Rental price have been going up in Salem so knew at minimum I could get $1,500 per month in rent. Another solid investment.

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

I've been looking to purchase another unit in this building so I had been asking around. The owner reached out to me and my agent about my interest purchasing this unit.

How did you finance this deal?

I put 25% down and was able to get a 30 year loan with the first 10 years fixed at 4.875%.

How did you add value to the deal?

I spend a little extra dough to put in a new vanity in the bathroom but it really helped round out the unit and make it feel fresh and clean for the new tenant moving in.

What was the outcome?

I was able to find my tenant and start showing the unit before I closed on this deal. I closed on this deal on Aug 30th and the new tenant moved in Sept 1st. I've had no vacancy on this unit and the tenant just extended their lease for another year.

Lessons learned? Challenges?

I learned that it doesn't hurt to ask the current owner if they are okay with me showing the unit for rent prior to my actually closing and owning the unit. They didn't mind and as a result I was able to find a tenant that was able to move in the day after I closed on the unit.

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

Sean Connelly from Remax in Marblehead, MA was my agent on this deal and I again worked with Fairway Mortgage to help with the financing.

Investment Info:

Other buy & hold investment.

Purchase price: $219,000
Cash invested: $12,000

This unit in Lynn (on Lynn Shore Drive) was my 2nd investment in a condo. It's a 1 bedroom, 950 sq feet unit. It's in a building that has 59 units and is professionally managed on the water. The unit has a balcony that looks out on to the ocean. The building has many cool amenities like a small gym, pool, off street parking and additional storage for each unit in the building on the 1st floor. I'm getting $1,700 per month in rent for this unit and making $425 per month after all my expenses.

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

This was a great condo that needed a little TLC (just cosmetic stuff) and I was able to get a great deal on it paying only 219K for it. The taxes and condo fee are low which helped make the ROI with the investment. The building has a lot of amenities like a pool, gym, additional onsite storage for each unit. The build is professional managed as well and it's located right on the ocean.

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

The agent that I worked with on my 1st investment properties was friends with the selling agent on this unit. He gave me the heads up early on this unit and I offered the asking price right when it was listed. I was able to scoop this up with an aggressive closing date but I was also willing to let the owns rent the unit back from me at below market while they looking for a home to purchase but I also knew they wanted to be in a home by June 1st.

How did you finance this deal?

This was a residential loan. I put down 25% and was able to get a 30 year loan with the first 10 years fixed at 3.875%.

How did you add value to the deal?

I used the HELOC from my 2-family home to help make the down payment on this investment. The $400 per month I make in profit from this unit goes back into paying down the HELOC I used to make the down payment.

What was the outcome?

Awesome. I did have to sink about 12K into the unit to update it, but the value of unit was just appraised at 270K and I've had it less then 2yrs. I've had great tenants and have only had 2 weeks of vacancy since renting the unit out. It's been a great experience.

Lessons learned? Challenges?

The first year I asked for $1650 in rent. I was scared to ask for $1700. When the old tenant moved out I pumped the rent up to $1700 and had no issues finding a new tenant. I should have been more confident to asking for the $1,700 upfront that first year renting the unit out.

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

Sean Connelly from Remax in Marblehead was my agent. I used Fairway Mortgage to finance the deal.

Investment Info:

Other buy & hold investment.

Purchase price: $160,000
Cash invested: $3,000

This was my first investment. It is a small 490 sq foot condo. I purchased it in July of 2017 for 160K. I've put 8K total into the unit and I collect 1,400 per month in rent. I should be getting 1,500, per month but my current tenant is amazing and I've kept the rent the same since he moved in to keep him around. I currently make $400 per on this unit after all my expenses. I'm about to upgrade the bathroom so next year the rent will be going up.

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

Small condo's in large professionally managed buildings are being ignored by investors so I was able to find a good deal on this unit.

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

I've been aware of the units in the building for a few years. I finally developed the courage to take the plunge on my 1st investment.

How did you finance this deal?

Residential Mortgage 30 year fixed rate at 4.5%. My down payment was 25%.

How did you add value to the deal?

I used my HELOC on my two-family property that I currently live in for the down payment on this investment. The profits from this investment are now going back into paying down my HELOC that I used to draw the funds from.

What was the outcome?

It's been great. I found my tenant before I closed on the property. I've only had to invest $3,000 into cleaning up the unit. My tenant never bugs me and he pays the rent on-time every month. I currently make $400 per month on this unit that I put back into paying down the HELOC i used for the down payment on this investment.

Lessons learned? Challenges?

I wished I had not dragged my feat on units in this building. I could have purchased a unit 3 months earlier for $150K if I had not be tow scared to make my 1st investment.

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

I did have an agent. A gentlemen named Sean Connelly, a Remax agent, out of Marblehead MA. I also used Fairway Mortgage to help me finance the property.