All Forum Posts by: Justin Dias

Investment Info:

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

Purchase price: $71,375
Cash invested: $162,450

Purchased this property (along with another) using the BRRRR strategy. We took out a HELOC on a 5-family, which allowed us to buy this property "cash" and completely rehab it. Purchase Price = $72,000 Rehab = $90,450 ROI = 13.94%. Currently we're in the process of securing a business line of credit with this property (and another one) and use those funds to possibly scale up into large multi-families.

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

This was a very distressed 2-family in a nice area (actually right down the street from another rehab we did). We ran the numbers and had enough of our HELOC left over to make a cash offer and rehab the building to be completely rent ready.

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

We actually found it through the MLS. It was bank owned and we acted quick with our cash offer in "as-is" condition.

How did you finance this deal?

We financed this deal by taking out a Home Equity Line of Credit on a 5-family we owned free and clear.

How did you add value to the deal?

We completely gutted both units, in some cases right down to the studs, and completely renovated it with new kitchens, baths, flooring etc.

What was the outcome?

We worked with an amazing contractor Beauregard Building & Remodeling, who came in on time and on budget! So we worked on the rehab right through the winter and had it up for rent in the spring. Currently rented by two great families and cash flowing nicely!

Lessons learned? Challenges?

We learned the value of hiring a good general contractor. We can't say enough about Beauregard Building & Remodeling, he was very nice, receptive to our ideas, honest and transparent with all aspects of the job. This relationship allowed us to get this building rehabbed and rented according to plan! (which is very rare...)

Thanks Max Denning and Douglas for the replies. I do currently create and tenant account with their last months and security payment. But a while back I unfortunately had to evict a tenant and once the judge realized they hadn’t been paid their interest every year I got whacked with a fine and the eviction process got messy... But I wonder if you could include a statement in your rental agreement stating that you’d give them their interest upon moving out and as long as they agree and sign you’d be all set? Does anyone know if this would be a good way to handle it legally? Thanks again

@Mike Cartier So will the bank actually send the tenant a check for the interest? 

According to the mass Landlord / Tenant laws: "On the anniversary date of the tenancy, you must send the tenant a statement of the interest owed with a check for the interest, or you must notify the tenant that s/he may deduct it from the next rental payment"

Sorry if I'm talking in circles, I'm just trying to understand if there's anyway I can remove myself from this process while at the same time making sure the tenant gets their interest in the form of a check every year...

Mike Cartier thanks for the response, I may not be understanding this completely but how does the tenant actually get the money?

Hi Thomas, in MA the landlord is required to hold both the security and last months rent in an interest-bearing account. So the tenant is entitled to the interest accrued from that account.

Rich N. Thanks, it looks like there’s one in my area I’ll have to give them a call.

I'm an investor in Massachusetts and I'm curious if there's a creative way to set up the landlord/tenant account that holds the tenant's security and last months rent deposits in such a way that the annual accrued interest can be paid to the tenant automatically...

As of right now I'm required to manually send a check to each one of my tenants on their year anniversary. I'd like to think there's an easier way to do this, any help would be great!

Thanks!