All Forum Posts by: Derek DeVerna

I contracted a property here in beautiful Toledo, Ohio over the weekend. The lead came in through a direct mailing campaign that went out last week. The seller lives out of state, is behind on his property taxes, and just wants to unload this house that he inherited five years ago. For the last 4 years his nephew has been living in the property rent free. Needless to say, this has had a tremendously negative impact on their relationship. 

For this reason I was unable to enter the property before placing it under contract. This does not scare me, as I have an inspection period on the contract and was able to leverage the lack of access to secure a very cheap price on the home. The owner was kind enough to supply me with his nephew's contact information, but I have not had any success in contacting him. 

I typically offer "cash for keys" in this situation, as I can usually get the tenant out of the property for less than an eviction costs. However, if I cannot get ahold of the tenant I obviously cannot make a cash for keys offer. Would it be in my best interest to try knocking on their front door and introducing myself? Or should I just plan on filing an eviction? Any insight or personal experience would be greatly appreciated. Thank you kindly. 

I have acquired numerous properties through Auction.com and other online auction websites. I can tell you that @Philip Williams is 100% correct in saying that the property has no chance of selling for 17k. I would also encourage you to look into the closing costs associated with each property. There is often a "buyer's premium", which can ultimately prove to be very expensive as well. 

The number of deals I have been able to acquire through auction.com has significantly decreased over the course of the past two years. It seems as though the banks are more willing to hold the properties longer to avoid losing money or trying to make the highest profit possible. Either way I haven't bought a deal off of this website in a few months. I would suggest networking with off-market deal sources. Those are undoubtedly where the best deals I've ever found came from. Best of luck to you. 

@Andrew Martherus My name is Derek and I am a full time investor from the great state of Ohio. I would argue that your background as a software engineer could significantly benefit someone like myself, whom doesn't fully utilize 2019 technology to their advantage. 

I recently agreed to partner with a young investor that I actually sold my Multi Family Fix and Flip to (see post from last week). This gentleman has a computer background and is currently working on developing an algorithm to simplify my direct mail list compilation. This has the potential to save me countless hours and increase the amount of effective direct mail that I am able to send out on a weekly basis. 

I am confident that there are multiple investors in your market that could use your computer background to their advantage. Don't sell yourself short. 

@Heshel Mangel The project took 10.5 months from acquisition to disposition, which was a little longer than we would have liked. The City of Cincinnati Building Department really slowed us down quite a bit. Everything was done by the book with permits pulled. This often adds time to projects, as inspectors can be difficult to deal with. I spent about half the time in Cincinnati and wrapped up everything from out of town. 

@Ahmad Nassar I use Mortgage Man Lending LLC out of Louisville, KY for all of my HML needs in Cincinnati. I would love to put you in contact with the owner if you are interested in reviewing their services. Feel free to send me a direct message if this is the case.

Investment Info:

Small multi-family (2-4 units) fix & flip investment in Cincinnati.

Purchase price: $54,000

Sale price: $275,000

Large scale residential redevelopment project in the Madisionville neighborhood of Cincinnati, Ohio. This is the first major renovation project that I have done (rehab costs well over $100K). My plan was to rent both units out at a premium upon completion and then refinance the building to harvest my initial capital investment back. However, I decided to move out of Cincinnati and become a full time real estate investor. The sale of this property

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

As a licensed agent/wholesaler I saw the value of properties in this neighborhood continuing to increase. This allowed me to spot this opportunity as soon as it was presented to me (off market).

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

I found this deal through a wholesaler that I have completed many transactions with in representing other buyers. This was the first time that I decided to personally purchase a deal provided by this gentleman.

How did you finance this deal?

I financed this deal through a hard money lender.

How did you add value to the deal?

I gutted and rehabbed the entire property from top to bottom. Opening up the entire floor-plan, adding a new roof, porch, deck, kitchen, appliances, and much more.

What was the outcome?

I ended up netting just over $39k on this deal.

Lessons learned? Challenges?

Holding costs ended up being much higher than I anticipated. The hard money costs, property taxes, electric/gas, and water bills really add up and need to be taken into consideration when evaluating any potential flip deal.