All Forum Posts by: Dan Milinazzo

 Congrats Aaron!

Did you do this BRRRR in your own name or an LLC? What LTV did your lender give you? And what kind or rate on the refi?

The back end refi is something I'm trying to get more comfortable with and I know it can vary greatly.  We are trying to line up a lender at the same time we are searching for our next deal so that hopefully we have a lender on board ready to pull the trigger once we rehab and stabilize the property.

Its different for everyone.  I have refinanced to take advantage of lower rates after about 2 yrs of ownership and again when market appreciation forced a fair amount of equity that I wanted access to after about 10 yrs.  Every deal will be different, but that's my scenario.  

You will likely have closing costs but no you dont have a new "down payment" your equity in the property is your built in down payment. 

good luck 

@Manny Lopez I did not end up using them.  I am still looking for a reliable source myself.  

@Michelle Reid There is absolutely nothing to be sorry about.  Even a not so great deal has value.  I have been a member here for 9 years and just 6 days ago finally posted about my first "deal". This is My Deal.  My deal was from 2009 and its all I currently have listed.  I have since bought and sold a couple primary homes, but no completed investment deals to post about.  I have analyzed a couple dozen properties, walked a few less, and offered on only a handful in that time since 2009.  More recently I have made some moves to free up capital, networked with some like-minded individuals that travel in my social circles, and about to get back into local meetups.  NH and MA both have plenty to offer, and they each have their pros and cons.  My rental is in MA, but its a tenant focused state, so there are some challenges to that for a landlord.  My primary homes have been in NH though because where I am in the state NH just has more appealing properties dollar for dollar.  

Where is home base for you and do you have an investment plan now that you are getting back into it?

@Nettles Mason admittedly this is not my forte and a bit outside my personal skillset, however my immediate reaction was "Necessity is the mother of invention". If you came up with this because it would have benefited you in a situation then I would say that alone warrants the excercise, assuming it is in your skillset to do so. If this is something that you would need to dump a generous amount of capital on to bring it to reality I would really find a way to evaluate the ROI before going down that road or really dig through current offerings and see if something out there does a similar job. Getting back to this possible being in your wheelhouse, if you pursue it you may surprise yourself at the direction it branches off into and you may stumble across the idea to make the next BiggerPockets!

Happy Investing!

@Michelle Reid Sorry to hear the deal did not pan out.  The fear of a deal failing is hard to overcome, but getting out and doing it is where you start to see if this is really what you want to do.  If you can survive a not so great outcome and get right back up and move on to the next one, then as our NE Patriots say "on to Cincinnati".  Do you mind sharing your expenses breakdown? 

Best of luck on the next and future deals!

@Matthew Cater Buyer beware! :) There is so much data on BiggerPockets it's easy to become overwhelmed and not make forward progress.  (For the record, I love this place and the people on the site and the podcasts, etc).  If you want an unsolicited recommendation, start with the Ultimate Beginners Guide here-> BP Guides and find one topic that seems to interest you most and just start there.  

Then come back and keep everyone informed of your progress and questions.  Best of luck!  Happy Investing

@Seth Otto V Welcome to the community!!  I actually increased the speed of the podcasts to 1.5x to squeeze in as much as I could on my commute so I get it!  Fortunately (or unfortunately depending on how you look at it) I have more than 1 phone on me at all times so while I am driving and have 1 phone connected to the radio, I have the other on standy for taking notes (handsfree of course).  A simple pause of the podcast and a "hey google, take a note" and I verbally jot down whatever it is I want to remember to look into later. 

Best of luck! BiggerPockets is a monster database and you will not be left empty handed.  You don't need money to network and lend your hands/skills to other investors to learn as you go.  I need to take my own advice though and will be attending 2 networking events next week alone.  

@Ray Johnson how was the process and what kind of fees? I started a heloc app but had to put it on hold for a few weeks. I'll be starting again in the next 2 weeks with PenFed.

Investment Info:

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

Purchase price: $212,000
Cash invested: $12,000

2 family (up/down) property. 3 bed 1 bath each unit.

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

After a failed partnership on a SFR, I had to regroup and was determined to make the next move solo. I was looking for a deal that could use a little sweat equity, but still qualify for FHA for the low downpayment, and be worth something when I was done. A shortsale 2 fam that was being used as a SFR seemed to make sense. Landing a "flexible" FHA appraiser was crucial to the deal, but was pure luck.

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

Found the deal on MLS. I was 3rd in line on the offers and I offered asking price. After the first two buyers fell through, my offer was signed. It was a bit of a surprise to me after 2 months had passed. After kicking the can down the road for about 6 months the "Bank" came back and said they had a better offer of $20k over my offer and were planning to let my offer expire after 4 extensions unless I increased my offer, which my realtor convinced me was still a good deal.

How did you finance this deal?

FHA

How did you add value to the deal?

I restored the property back to two true units, rehabbed one unit for rental, had the property deleaded, and brought the property back to competitive market rent.

What was the outcome?

Market was not coming out of the hole at the pace I was hoping so flipping the property was no longer an option.  Thankfully, renting while owner occupying was a solid back up plan at the time.  Now I am still holding the property, with stable tenants at competive market rate (just shy of market average).

Lessons learned? Challenges?

Shortsales can be painful, but if you can be patient you may still end up with a decent deal. Establish your number and try to avoid the emotion (or it could cost you $20k). Have reserves so you can afford to keep the unit empty until you get the RIGHT tenant at the RIGHT rate. Owner occupying give you some additional leeway with tenant selection. Don't think that you know the market after you close on your first deal.