All Forum Posts by: Earl Altheide

West side of Buffalo

I will email you.  We have serious buyers with interest.  

As someone that has previously worked as a financial advisor and currently works as a real estate agent, I think you definitely need an agent independent of your financial advisor.  A financial advisor is going to be able to offer you REITs or similar products, whereas an agent can help you navigate markets and specific properties.  An investor focused agent should also be able to help you determine what the future performance of a property looks like by producing you a nice proforma with budgets and projections.  

Investment Info:

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

Purchase price: $167,000
Cash invested: $302,000

BRRRR, Buffalo, NY
Exterior-Rear porch was removed and replaced with new entrance stairs, the front porch deck was rebuilt and the roof and gutters were replaced, new sheeting included. New concrete stairs on the front.
Interior--Kitchens and baths were gutted, house received new wiring, all walls and hallways were painted. New flooring and windows throughout. Added in unit laundry to the first floor apartment. Brand new kitchens and baths. Mechanicals completely updated.

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

Appreciating neighborhood
Located on a main street in the neighborhood

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

Found on MLS, Offered cash at a lower than asking price. Looking back I wish I had negotiated even more.

How did you finance this deal?

Cash

How did you add value to the deal?

Redoing everything and making sure we didn't miss anything that would sour all the effort that went into this place.

What was the outcome?

A strong refinance rate at $382,000 that ended up having me leave about $45K in this deal with all bank fees included.

Lessons learned? Challenges?

Plan to do everything. We considered skipping removing the popcorn ceiling, this ended up getting done. We thought the back porch would be fine in its purchased condition, it ended up being a liability and getting removed and replaced with a set of stairs. Once done with everything, the front concrete stairs were not in good shape and we ended up opting to do about $6K in concrete work as well.

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

I was my own agent.

Investment Info:

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

Purchase price: $167,000
Cash invested: $302,000

BRRRR, Buffalo, NY
Purchased a double with good bones needing a lot of aesthetic work.
Purchase: $167000
Renovation: $135000
All In: $302,000
Financed at: $382,000 with a 70/30 Cashout

On exterior, a rear porch was removed and replaced with new entrance stairs, the front porch deck was rebuilt and the roof and gutters were replaced, new sheeting included. New concrete stairs on the front.

On interior, kitchens and baths were gutted, house received new wiring, all walls and hallways were painted. New flooring and windows throughout. Added in unit laundry to the first floor apartment. Brand new kitchens and baths. Mechanicals completely updated.

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

Appreciating neighborhood
Located on a main street in the neighborhood

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

Found on MLS, Offered cash at a lower than asking price. Looking back I wish I had negotiated even more.

How did you finance this deal?

Cash

How did you add value to the deal?

Redoing everything and making sure we didn't miss anything that would sour all the effort that went into this place.

What was the outcome?

A strong refinance rate at $382,000 that ended up having me leave about $45K in this deal with all bank fees included.

Lessons learned? Challenges?

Plan to do everything. We considered skipping removing the popcorn ceiling, this ended up getting done. We thought the back porch would be fine in its purchased condition, it ended up being a liability and getting removed and replaced with a set of stairs. Once done with everything, the front concrete stairs were not in good shape and we ended up opting to do about $6K in concrete work as well.

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

I was my own agent.

I suggest you consider the out of pocket capital you may need to improve the second floor unit that is already existing and rentable.  You may find it’s best to just search for your next deal and consider coming back to this opportunity at another time.  

Investment Info:

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

Purchase price: $167,000
Cash invested: $302,000

Purchased a double with good bones needing a lot ofwork.

On exterior, a rear porch was removed and replaced, the upper front porch deck was rebuilt and the roof and gutters were replaced. New concrete stairs on the front.

On interior, kitchens and baths were gutted, house received new wiring, all walls and hallways were painted. New flooring and windows throughout. Added in unit laundry to the first floor apartment. Brand new kitchens and baths. Mechanicals completely updated.

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

I like starting off with a very well conditioned house that poses very little maintenance, cap-ex or vacancy expense in the future.

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

I am a realtor and negotiated the house as a cash offer.

How did you finance this deal?

The sale was completed in cash and the renovations in cash as well and we are currently refinancing the deal now to get most of our cash back.

How did you add value to the deal?

Updating everything. With quality, well done renovations, things won’t need to continually be updated in the future.

What was the outcome?

Strong tenants at good rents. A well conditioned house that people are happy to live in.

Lessons learned? Challenges?

The market has changed a lot over the last 7 months this deal has been going on, however changing market conditions didn’t ruin a good deal so there was no hesitation to move forward.

A better plan upfront can save you weeks and even months when working through a deal.

Always plan for the unexpected, the front porch roof and rear porch removal were two items that required a lot of extra time and money.

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

Yes
My company Irish Jones did the work and will manage the house. I am a sales agent and handled the transaction. The quality doesn’t change for clients.

Investment Info:

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

Purchase price: $167,000
Cash invested: $302,000

BRRRR, Buffalo, NY
Purchased a double with good bones needing a lot of aesthetic work.

On exterior, a rear porch was removed and replaced with new entrance stairs, the front porch deck was rebuilt and the roof and gutters were replaced, new sheeting included. New concrete stairs on the front.

On interior, kitchens and baths were gutted, house received new wiring, all walls and hallways were painted. New flooring and windows throughout. Added in unit laundry to the first floor apartment. Brand new kitchens and baths. Mechanicals completely updated.

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

I like starting off with a very well conditioned house that poses very little maintenance, cap-ex or vacancy expense in the future.

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

I am a realtor and negotiated the house as a cash offer.

How did you finance this deal?

The sale was completed in cash and the renovations in cash as well and we are currently refinancing the deal now to get most of our cash back.

How did you add value to the deal?

Updating everything. With quality, well done renovations, things won’t need to continually be updated in the future.

What was the outcome?

Strong tenants at good rents. A well conditioned house that people are happy to live in.

Lessons learned? Challenges?

The market has changed a lot over the last 7 months this deal has been going on, however changing market conditions didn’t ruin a good deal so there was no hesitation to move forward.

A better plan upfront can save you weeks and even months when working through a deal.

Always plan for the unexpected, the front porch roof and rear porch removal were two items that required a lot of extra time and money.

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

Yes
My company Irish Jones did the work and will manage the house. I am a sales agent and handled the transaction. The quality doesn’t change for clients.

Investment Info:

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

Purchase price: $230,000
Cash invested: $45,000

Upper_Lower Double with 2 renovated units, new roof, new concrete driveway, vinyl siding, new windows throughout

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

Great location, good condition

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

Bought it on market through the MLS

How did you finance this deal?

Conventional financing

How did you add value to the deal?

Updated upper unit with new kitchen, bathroom updates, fresh paint, new windows and new lighting

What was the outcome?

Improved rent from $850 to $1400.

Lessons learned? Challenges?

Move quicker, I took a long time to turn the unit over

Overall this seems like an avenue you want to try and avoid.  
if you still pursue this path it may benefit you to take into consideration the amount of materials as his “sunk” cost.  It’s diifcult to determine his costs regarding the labor, ie his employees hourly cost is a lot higher than their wage plus he may have payroll and insurance costs to consider.  
This sends up red flags in my mind about the quality of the work and materials chosen.