All Forum Posts by: Derek Wilson

I am interested in a property that has 2 houses on one parcel. It is a cash only listing. I would like to purchase in cash and then cash-out refinance. Asking 140,000. Potential rent total $2,000. Both houses need some work on the exterior but look great inside. Thoughts?? Do lenders have an issue doing a refi on this type of property or is it considered a duplex even though they are not connected? Property is in NC

Investment Info:

Single-family residence other investment.

Purchase price: $20,000
Cash invested: $400,000
Sale price: $485,000

Purchased vacant lot. Subdivided into 3 lots built 2 new spec homes and sold one lot.

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

Wanted to gain experience in new builds

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

off market. networking found someone that was wanting to sale land

How did you finance this deal?

owner financed the land, construction line of credit

How did you add value to the deal?

Built new houses

What was the outcome?

Only profited 65k but it was a great learning experience.

Lessons learned? Challenges?

I learned a lot about financing new builds, pricing new builds and finding subcontractors

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

Yes! Myself!

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $78,000
Cash invested: $20,000
Sale price: $152,000

Foreclosure we bought, lived in and renovated. Sold it after 3 years for a 50k profit.

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

On market foreclosure. It was a homepath property which takes in to account owner occupant offers before looking at investors offers.

How did you finance this deal?

100% 5/1ARM Conventional loan. Cash-out Refinance after renovation.

How did you add value to the deal?

Significant renovation

What was the outcome?

Had a cheap mortgage payment while we lived there and made 50k

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

Yes! Myself!!!

Investment Info:

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

Purchase price: $145,000
Cash invested: $10,000
Sale price: $240,000

My first investment!! A house-hacked duplex. One side needed significant renovation (the side we occupied) which I mostly did myself. The other side was ready to be rented when we purchased the property. we lived in one side for 2 years (doing this helps you avoid capital gains tax) then we purchased a foreclosed fixer upper and rented both sides. It was getting $1900/month gross rent. I sold it in order to invest the appreciation into a new build investment.

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

I was poor and house hacking seemed like my best option!

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

On market deal.

How did you finance this deal?

Long story but it was supposed to be an fha loan that was turned into a conventional loan with fha 3.5% down payment. I got lucky

How did you add value to the deal?

Significant renovation to one side. Area where it was located became in high demand so it appreciated quickly.

What was the outcome?

Made a lot of money with the appreciation and rent received. Gained experience with renovation and rentals.

Lessons learned? Challenges?

You have to be willing to gamble (smart risks), make sacrifices, and keep grinding to accomplish your goals!

Investment Info:

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

Purchase price: $145,000
Cash invested: $10,000
Sale price: $240,000

My first investment!! A house-hacked duplex. One side needed significant renovation (the side we occupied) which I mostly did myself. The other side was ready to be rented when we purchased the property. we lived in one side for 2 years (doing this helps you avoid capital gains tax) then we purchased a foreclosed fixer upper and rented both sides. It was getting $1900/month gross rent. I sold it in order to invest the appreciation into a new build investment. My wife and I were also planning on moving so I didn't really want an out of town rental.

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

I was poor and house hacking seemed like my best option!

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

On market deal.

How did you finance this deal?

Long story but it was supposed to be an fha loan that was turned into a conventional loan with fha 3.5% down payment. I got lucky

How did you add value to the deal?

Significant renovation to one side. Area where it was located became in high demand so it appreciated quickly.

What was the outcome?

Made a lot of money with the appreciation and rent received. Gained experience with renovation and rentals.

Lessons learned? Challenges?

You have to be willing to gamble (smart risks), make sacrifices, and keep grinding to accomplish your goals!

It depends on your plan. As a buy and hold investor I would be all over the deal. With your cash flow I'm guessing you are putting 20% (6k) down. After repairs and closing costs (if you pay them) you have about 13k give or take of your cash in the property. Cash flowing 9200 per year you make your money back in a year and a half. If you take into account that rent will continue to increase over the years while your payments remain the same your cash flow will only increase.

You can also consider refinancing and getting your cash out which would cut into your cash flow some but you cant complain about +8k per year on $0 of your money.

The deadline is just to pressure you to make a decision. Until both parties have signed the offer it is not a contract and the offering party may cancel the offer at anytime before the contract is formed.