All Forum Posts by: Dominic Lucarelli

Hello fellow investors! It's been awhile but I've got some great updates for you:

Property #1:

Spent my first year after my purchase learning the ins and outs of being a new Landlord. I evicted my first tenant in the lower unit for non-payment. The second unit up and left about 2 months later, leaving me completely vacant. My wife and I struggled with cleaning up the filthy units and getting them up to specs: new paint, new carpets, and a few minor repairs. Code Enforcement came along and beat me up pretty good. Repairs and updates totaling $12k. Moved in my first tenants on my own, then got a property manager on board. So much easier to pay him to worry about things! These tenants came and went. Property manager moved in 2 new sets of tenants. All in all I'm happy I made the decision on hiring a property manager. He's worth much more than the fee he makes every month just off his connections alone! Current rents are $550 and $595 = $1145/mo

Total investment: $20k purchase price + $12k updates and inprovements = $32k

Property #2

Another duplex in Wilmerding! Purchased this one about 6 months ago. One block down the street in Wilmerding. Separated the water lines (since they were all on one meter) to the tune of $1000. Replaced the flooring in the upper vacant unit. Minor repairs for the lower occupied unit. Just recently had a water supply line burst at the curb. Water company turned off water to the building until the issue was fixed. Obviously the tenants were none too happy. $5k later and one week later the water company turned the water back on, good as new. Property manager handled all contacts with the water company, placing a tenant in the upper unit, and coordinating the emergency water line repair. He got a case of his favorite beer this past Xmas for his efforts. Current rents are $600 including water (from Section 8) and $595 = $1195/mo. Total Investment: Purchase price of $28k + $5k rehab + $5k emergency water line break = $38k

Property #3

Closed on it this past Thursday. Another duplex, but in a much better location: Irwin, Pa! Very very rough property. Listed by the bank for $24,900. We offered $10k. The bank countered back at $20,900. We countered at $12,000 and they accepted! We've got a lot of rehab on this one, however: needs all new plumbing, all new HVAC, updated flooring, updated kitchen cabinets, and a whole new bathroom in one of the units. Total rehab budget of $56k. Should appraise at $120k+ once the work is done. Expected rents in this area depend on fit and finish. Upper unit is either a big 1-bed unit or potentially a cozy 2-bed unit (estimated rent @ $650) and the lower unit will be a big 3-bed (estimated rent @ $900). Total Investment: $12k purchase price + $56k rehab budget = $68k.

Killing it! but I need a bit of help on the rehab money. If you know of anyone who has private money that needs put to work, I'm your man!

Great investors learn how to hedge their downside and move their money. If you're expecting a doomsday scenario, how to you cap your downside exposure in your world? If your invested in higher-end/luxury space, when the world comes crashing down expect those investments to take a huge hit. Try to rotate into mid-level, "working man" investments. If your already in that space, you might want to consider rotating into some lower level investments. When catastrophe hits, EVERYONE tightens up their belts (i.e. becomes more conservative) and switches into survival mode (yourself included!). Personally I've developed a blend of investments across all spectrums (low, mid, luxury) to stay diversified and cap my downside for just such a crash. And if the crash comes, make sure to bring your cash! Everything will be on sale! :)

Happy hunting!

Hi John!

Have you found anyone yet?

If not, I've got a guy. Feel free to reach out and I'll connect you.

Best wishes...

My advice to you is to research exactly what each legal entity does (LLC, S-Corp, C-Corp, etc.) and which one works best for your current and 5 yr Real Estate goals. To your success... -Dominic

I'm a local PGH guy myself and finally took the plunge. I've got an owner-financed deal I can't close on since I just used up my available Capital. I'd be happy to partner with you if you're willing. PM me here

@Chris Chesser Asking price was $20k. Home inspection revealed that the front porch needs additional bolstering. A minor repair roughly $500. A small adjustment to the venting of the hot water tanks. Cost: my personal time :) Adding in some minor plumbing in the laundry area: $100 Weather proofing part of the back porch: $100

@Anthony Angotti On a longer term horizon, I'm setting aside 60% of income for CapEx/Repairs ($500) to get the building up to MY standards. I've told the tenants I'm willing to honor their old Lease ($400/mo) if they follow my rules. Market rents in the area are $545 and $700 respectively, so I've got some room to grow. Haven't received a cent in rent yet but have documents ready to mail to correct. Word from the previous owner is they are also habitually late on payments. I gave them both a rental application to fill out, neither have done so yet :) Should make it easier to evict them since they are only month-to-month. This is a great learning experience so far. Seriously!

SO.... after reading countless posts, listening to EVERY single BP podcast, joining the amazing Bigger Pockets community, I finally took the leap:

I just closed on my first RENTAL PROPERTY!

1. How I found it - I found it after networking with one of my local REI Groups (Shoutout to Otis DiCerbo!)

2. The numbers - It is a Duplex in the area of Pittsburgh known as Wilmerding. It's a D-class neighborhood sandwiched between Monroeville, North Versailles, and East McKeesport.

Former owner has the downstairs 1-bed unit renting for $400/mo. and the upstairs 2-bed renting for $400/mo. Purchase price: $20,000 Anticipated ROI = (Income: $800*12) - (Expenses: $500 taxes + $245 trash + $700 minor repairs) / $20,000 = 38%

3. Negotiation - He wanted out badly, and it was too good of a deal to pass on. I walked the property twice, had a home inspection, and took the leap!

4. Outcome - I bought it and I'm in the process of setting things up the way *I* want things to run! 

Biggest lesson here is: There are owners who want out of their units. NETWORKING made this deal happen!

Again, ultimately it depends on your goals. If you're doing the cash out refi, it's to buy more properties to increase monthly cash flow. He'll lock in the cash flow, while you're building up the asset portfolio for the both of you with the refi. It's a win-win. Since your cash is taking the biggest risk and your son-in-law is putting in his time, I feel your 66% / 33% split would be fair. The more properties you buy, the higher his income as well. Just my 2 cents.

I'm no expert, so take this with a grain of salt. Sounds like the supply line serving your neighbor is your neighbor's issue. The leak may be in your yard, but it's his/her responsibility. If the water is causing damage to your property, you'd likely have a claim against your neighbor if they haven't taken care of it in a timely manner.