All Forum Posts by: Elijah Berg

Investment Info:

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

Purchase price: $180,000
Cash invested: $19,000

Contributors:
Stephen Schmitt

First investment house hack!

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

Projected CF after the first year is $650 after PITI, Vacay, Repair, capex, Etc.
Purchased under market rent as tenants were paying $880 m/o. After one week of ownership, using the Binder Strategy from the Dion Talk I was able to increase rents to $1,200 m/o a 36.6% rent increase while having the tenants stating I am the most solid landlord they have had after doing minor repairs for rent increase !

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

found by my amazing realtor in A class neighborhood! first place winners offer fell thorough and as a result I had the second highest offer!

How did you add value to the deal?

Currently performing DIY Rehab within house hack to get the other unit rent ready while learning all I can to perform the "who not how" during my next investment!

Investment Info:

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

Purchase price: $180,000
Cash invested: $19,000

Contributors:
Stephen Schmitt

First investment house hack! found by my amazing realtor in A class neighborhood! Projected CF after the first year is $650 after PITI, Vacay, Repair, capex, Etc.
Purchased under market rent as tenants were paying $880 m/o. After one week of ownership, using the Binder Strategy from the Dion Talk I was able to increase rents to $1,200 m/o a 36.6% rent increase while having the tenants stating I am the most solid landlord they have had after doing minor repairs for rent increase !
Currently performing DIY Rehab within house hack to get the other unit rent ready while learning the ins and outs to start implementing "who not how" for my next Investment!

 No, hopefully, one day soon though!

I met my mentor Greg through my gym as I am a registered amateur USA boxer and I always wondered why this older fellow was always boxing with us at the gym and never at work. He told me he was a Landlord and I asked him "As in a real estate investor?" and he said yes, from there I've spent countless hours working with him on his properties out of the gym to expand my knowledge the best I can. 

yes, the asset is entirely within my name, and thank you so much for the Congrats on the success!

thankfully I get to share my story further in-depth next week as 
I have the opportunity to record with Ashley Kehr and Tony J. Robbinson for The Bigger Pockets Rookie Podcast episode coming up!!!




 

 Hi Ama! Thank you for responding

funny enough I did the exact same thing and it works out perfectly fine! during my process of investing and the extent I have gone, I have the opportunity to record with Ashley Kehr and Tony Robbinson for a Bigger Pockets rookie episode coming up!

Thank you so much for your time and help!!!

As in my mentor decided to help me by paying his crew for a week? Then Yes, that's exactly what I'm saying.

Why does he decide to help me? because that's how our relationship works.... I've done plenty of work in the past for him where this is simply returning the favor to help on my first property!

Thank you!!!

 Hi Rick! By myself, not much would be possible. So thankfully with the help of my mentor and his crew of Six, we were able to complete all prep and are amidst our final pass for sanding floors before our water-based polyurethane. 

We discovered the previous owner had dementia which explained most of the work we needed to do, Our short-term is improving that unit to rental standard, not necessarily adding property value as he and I are still drawing floor plans for Long term.

Thank you!!!

Stuck? The tenants proposed the rent increase to $1200, not me...... I'm a little confused here. If you watched the video I provided in the post It will explain how the strategy works very clearly.

also thanks for the advice! but without the whole "broadcasting" thing that you mention, I don't think I would have generated the outreach to the people of my age today who ask me for guidance on their first investment.

Have a great rest of your day and thank you for your consideration!!!

Hello, Bigger Pockets community!

I am very excited To have finally closed on my first investment here in Liverpool NY as a 19-year-old investor as of last week and be auditioning for the Bigger Pockets rookie podcast this Monday! After a couple of years of treading the path to frugality to build this financial runway, I've networked with the greatest people who made this all happen, of course, it took the strength, determination, time, etc to place myself where I am today but, without the mentorship of my two great mentors whom I wish used BiggerPockets so I can mention, I don't believe I would have made it thus far relying on some whimsical dream that this will all pan out accordingly, thank you for everything Greg and Lashawn.

In addition, I would like to thank Bigger Pockets for connecting me with the greatest realtor @Stephen Schmitt Who took my dreams and aspirations to the core when we first connected and spoke about my future goals to replace my W2 job for financial freedom. within three months of me deciding to pull the trigger and get pre-approved, we found this killer cash-cow that apprised over purchase price!!! 

After owning the property for 1 week and putting in a lot of sweat equity, I've concluded that I want to keep the Inherited tenants based on the condition of their living space and the quality of the people, Knowing I want to keep them to save myself the headache of a  turnover and vacancy of a projected move out If I were to suddenly increase rents. I turned to the Diontalk Binder strategy which educates the tenants on the current price of market rents, section 8, etc, and what I could potentially earn if they were to move out ( In this case being 1500 for a 3b 1ba). they then realize this and know paying a $400 increase (36.6% Increase) would be the best option vs moving out, living in cheaper housing, or going to market rent in the area. As a result, I've increased the rent to my standards and past other landlords' standards who are afraid to go past 10%!!! while leaving with happy tenants who will stay!

I hope to share the rest of my story hopefully being featured on the BP on the rookie podcast. If not I will consistently update here to create the biggest outreach I can considering my age!!! 

Thank you Bigger Pockets community. for everything!


Link to Binder Strategy- 

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Hello Everyone!

After making what seemed to be an endless amount of offers in this hot market, with a lucky turn of events of a sellers contact falling through due to the first place buyer unable to to afford financing. The sellers reconsidered my offer and I am finally under contract for my first
side by side duplex house hack here in Liverpool Ny!!!

One side of the property is currently occupied by a tenant whom has been there for almost a decade and is paying below market rent @ $880/mo WITH utilities included for a 3bd 1ba... Obviously I plan on increasing his rent to market value and switching utilities but hesitate increasing it past 20% due to the fact that during our walkthrough he seems like a solid tenant with a very well kept unit and even bought his own washer and dryers in the unit. My concern is, even though I am obligated to honor his lease until the end of June (estimated closing is June 15th), I don't know anything about him beyond his name. I have included an addendum for the seller to not alter or enter a new lease before or after closing which will give me the chance to enforce my new lease at the beginning of July if everything turns out all right and if extending past June than lease will be transferred month to month.

I'm assuming I would still run the current tenants through my own screening process. Do I move forward with them filling out the application before I've even closed on the property, along with paying for the credit/criminal/background check and sending them the Estoppel Certificate?
or have the current seller provide said info. with proof of payment and or renters insurance, turnover of security deposit & first months rent which my attorney will also be collecting, With it being such a quick turn-around with their current lease expiring I want to have as much lined up as I can and be the most prepared I possibly can.

Currently Still in the process of bulletproofing the new lease along with the operating and reserves accounts & setting up account/property management software. If anyone could provide some type of guidance/info.  towards this process of inheriting tenants within my first house hack that would be greatly apricated!

Thank you all for your time and communication!!! 

I am as well in this same position! I see this thread is somewhat older with a recent response.
@Ama I. have you had any luck navigating through this situation within your first house hack?

Thank you for your time and consideration on the response!