All Forum Posts by: Enrique Hernandez

Investment Info:

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

Purchase price: $350,000
Cash invested: $11,500

With the proceeds of the sale of our first fixer upper we purchased this duplex which we moved into one unit and same month purchased another duplex in another town to BRRRR.

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

Went from a single family flipper investment to a duplex for more cashflow

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

Found the deal myself on redfin after house hunting for several months. When I found the property I simply extended the radius of my search and tadaaaa "duplex" cought my attention and especially for a $350k purchase. We offered asking price to begin with to actually get our hand on the deal. Once we had the home inspection I was able to have the seller credit us at closing $8k...of which the escrow could not credit the entire amount and so I had the seller write up a personal check for $2000

How did you finance this deal?

FHA loan with 5% down, plus a seller credit of $8k

How did you add value to the deal?

The $8k credit was for repairs on the property. I personally made these repairs at a total cost to me for $150.

What was the outcome?

Still have the duplex and using it for the next deal as collateral on our first multifam 18 unit apartment complex

Lessons learned? Challenges?

Need to be patient and persistent with finding a property that fits my criteria for the present and future needs. A duplex to live in and easily able to exit out of it renting it 100%

Thank you for your input @Chris Clothier I really appreciate your words. I was also planning to work for a property managing firm to learn the ropes of the state and local codes while continuing to invest. Thank you!!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $160,000
Cash invested: $45,000

Ended up buying the property after getting to know the owners who were cleaning up when I went over to ask them permission to cut down the leaning branches toward their roof.

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

It was a deal that was offered to me directly by the owners using owner financing and i took it!

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

The property next door to this one I own 50/50 and went out to cut down a tree that our tenants said would fall on the neighbors home. I had seen the property listing already on redfin and wanted to buy it but had no cash! Again, I used my parents but this time only as lenders of part of the money for the down payment. I was able to secure $27k from them and $8k from our savings and the deal went through!

How did you finance this deal?

I was able to secure $27k from my parents as a direct non interest family loan and $8k from our savings.

How did you add value to the deal?

Renovated the inside of the house. Updated the kitchen, bathroom, and pulled permits to expand an additional bathroom/walk in closet. This extension is still under way. I rented out the 2 bedrooms 1 bath for $1,300/mn

What was the outcome?

I rented out 2 bedrooms 1 bath for $1,300/mn, as it is a 3 bedroom but blocked it off to be able to do the bathroom addition.

Lessons learned? Challenges?

Biggest lesson here for everyone is NOT to include utilities EVER!!!!! in the rent. The plan was to house hack the house by setting up the third bedroom as a studio apartment with its own bathroom and walk-in closet. Being that they have sepperate ways to enter the house it was reasonable. We rented the 2/1 side for $1300/mn and thought we could finish the addition of the bath and closet but got so busy with my construction business I still have not completed the work.

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

not for this one.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $160,000
Cash invested: $45,000

My parents my wife and I own the property next to this one. One day I get an urgent text message from our tenant that one of the trees is on its side leaning and wanting to fall into the neighbors home! Long story short, ended up buying the property after getting to know the owners who were cleaning up when I went over to ask them permission to cut down the leaning branches toward their roof. Also did owner financing with them with a purchase price of $160k a $35k downpayment. Loan had high terms of 9.5% calculated to 20 years and a balloon payment on the 3rd year coming up this April 1st. Currently we have it on the market but last night via Biggerpockets website I submitted a request for a loan and out of all the lenders Jason Ariazand Sr. Loan Officer, Brave Mortgage called me and we started a refinance option to be able to hold the property and get out of the balloon payment.

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

It was a deal that was offered to me directly by the owners using owner financing and i took it!

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

The property next door to this one is I own 50/50 and went out to cut down a tree that our tenants said would fall on the neighbors home. I had seen the property listing alfready on redfin and wanted to buy it but had no cash! Again, I used my parents but this time only as lenders of part of the money for the down payment. I was able to secure $27k from them and $8k from our savings and the deal went through!

How did you finance this deal?

I was able to secure $27k from my parents as a direct non interest family loan and $8k from our savings.

How did you add value to the deal?

Renovated the inside of the house. Updated the kitchen, bathroom, and pulled permits to expand an additional bathroom/walk in closet. This extension is still under way. I rented out the 2 bedrooms 1 bath for $1,300/mn

What was the outcome?

I rented out 2 bedrooms 1 bath for $1,300/mn, as it is a 3 bedroom but blocked it off to be able to do the bathroom addition.

Lessons learned? Challenges?

Biggest lesson here for everyone is NOT to include utilities EVER!!!!! in the rent. The plan was to house hack the house by setting up the third bedroom as a studio apartment with its own bathroom and walk-in closet. Being that they have sepperate ways to enter the house it was reasonable. We rented the 2/1 side for $1300/mn and thought we could finish the addition of the bath and closet but got so busy with my construction business I still have not completed the work.

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

not for this one.

Investment Info:

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

Purchase price: $162,500
Cash invested: $75,000

I was offered this property directly before it went on the market from my agent. Had the proceeds from my previous sold property. Ended up partnering with my parents 50/50 and actually was able to buy two properties the same month. A duplex where I live and the duplex that was offered to me.

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

More doors more cashflow. Much more sustainable than a single family

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

I was offered this property directly before it went on the market from my agent. She said the owners wanted to owner finance to avoid dealing with tenants. Property went on the market that week as we began negotiating terms. Ended up picking up the property for $162,500 from a listing price of $175,000. Owner offered financing if we put down $50k. Got a 5% rate calculated for 20 years with a balloon payment in 5 years (2026). We rented the property for $2000/mn and had a private mortgage of $743

How did you finance this deal?

Used owner financing

How did you add value to the deal?

Fully renovated both homes. Installed new roofs to both. updated the kitchen and bathrooms. New flooring throughout, new paint in and out. Cleaned up some tall trees

What was the outcome?

We are going on to 4 years of when we purchased it and have it now on the market. If we don't get what we would like we will refinance it and upgrade into the 10 door plus multifam network deals.

Lessons learned? Challenges?

Partnering up with family that has trust in our track record boosts confidence and allows for continued business. Biggest lesson would be to have refinanced when interest rates were low and locked in a fixed rate for longer terms without a balloon payment! Even if we got a higher rate then it would have still worked out not having a balloon payment next year. The challenges in this deal are minimal now that the property is vacant for sale. We pay the mortgage not the tenants!

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

Yes absolutely. We have continued to work with Teresa Fernandez the local go to real estate agent in Coalinga CA. Better to have one agent knowing I am an investor and handyman. She has recommended me to many others.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $45,000
Cash invested: $80,000
Sale price: $149,000

Purchased for $45k. Negotiated a 2 year $15k owner financing at 0% interest. Took me 2 years to completely gut and re do everything in the house. Learned that hired labor is the highest cost when rehabbing or fixing up to flip.

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

Always loved to work with my hands. Had studied civil engineering and worked at a few engineering firms before so I had a background but really wanted to be out and about working with my hands. Fix and flip for profit was kind of a no brainer since I could do all the work myself.

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

Used redfin to locate the deal. In the area I lived the properties were too expensive (Watsonville CA) so I began doing farther searches out of my area. Finally came across this one in the small but growing town of Coalinga CA. Used the listing agent to represent us both. I partnered with a friend on this deal, he put up $20k and his contractor knowledge and I the rest of the money to complete the work.

How did you finance this deal?

Purchased for $45k. Negotiated a 2 year $15k owner financing at 0% interest. Used $20k from a partner and the rest I sourced along the way.

How did you add value to the deal?

It went from a rundown home and outdated in every aspect to an up to date property that I rented for 2 and a half years then sold

What was the outcome?

After 2 years of work on weekends and holidays we rented the home for another 2 and half years then sold it. The sale proceeds allowed us to acquire two duplex properties.

Lessons learned? Challenges?

HUGE lesson learned!!!! When changing out a window for a bigger one, be certain to know the city codes. I was red tagged and ordered to pull permits and have the home inspected. The initial plan was to do minor cosmetic things and bring the kitchen and bath up to date but not knowing this fact made our $5,000 budget go to $50k costing us the two year full rehab. Inspector said "If I see it you need to fix it!" Ooops

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

Absolutely!! Teresa Fernandez with Fernandez Real estate in Coalinga California

Investment Info:

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

Purchase price: $130,000
Cash invested: $9,000
Sale price: $185,000

I did not have the knowledge then to keep the property and pull money out to complete renovations to another property we purchased a year after this one that required a complete overhaul. Used the proceeds to complete the work on a fixer upper I negotiated for $45k. Got a $30k downpayment and a $15k 0% owner financing for 24 months.

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

After reading Rich dad poor dad when I was 16 and began reading more of his books it was clear that a duplex was the way to jump start my career as an investor and more superior than a single family when it came to cashflow.

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

I was an avid redfin viewer from the beginning. Method of choice was looking for potential properties online using redfin then when I had run simple numbers I would drive by each property and its neighborhood and if it was worth pursuing, I would schedule to see the property through the selling agent. When I had located this particular duplex I contacted a local agent to represent me on the acquisition.

How did you finance this deal?

Used an FHA loan as owner occupying with a 3.5% downpayment. My understanding at the time was that I may not qualify any other way. With this said, all went through fine I was contacted by the FHA representative about three months of owning the deal and I had to write a letter explaining why I had not occupied the premises. In reality I had just gotten into an accident and was not able too even if I wanted so everything lucked out.

How did you add value to the deal?

Raised the rents from $550 to $650 for the 1 bed 1 bath unit and from $625 to $750 for the 2bed 1 bath

What was the outcome?

the property tenants paid for my wife's new car that we needed.

Lessons learned? Challenges?

I learned it was possible to buy investment properties and manage myself from a distance. Always super helpful to have another handyman in the city you invest for the minor repairs. My biggest challenge was dealing with tenants. It was our first investment so it was new to us. The challenge was separating business from personal relationship. Best not to step beyond owner tenant relationships. Becoming "friends" is not recommended.

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

Not for this one.

Great day to all,

I've just been soaking up all the online youtube videos from Bigger pockets one after the other and I've made the determination to scale my business massively using the multifamily addition into our (wife and I) portfolio. 

A little background: Feel free to scroll down for the main reason of this post...I started out in 2011 trying everything to make my start in real estate but was not successful until 2015 when we purchased our first duplex in Fresno CA. From that deal we bought our next and first fix and flip property the following year. Learned sooo much about the process, took us 2 years to do it all only on weekends and holidays. Once all the work was done we rented the home for a couple years and then sold. Keep in mind that all this time we were living with my parents paying them rent but saving/starving to score our next deal. With the proceeds we later purchased two properties the same month, one with FHA loan 5% down and received a closing credit of $8k plus a $2k check made out to us after closing. Unfortunately I was told they could not give us the full $8k for some reason but credit us $6k which was awesome plus the $2k directly mailed check from the seller. All done paid $9,500 out right and to this day live in one side of the duplex and rent the other. Same month June of 2021 I was offered a great duplex and partnered up with my parents 50/50. Paid $50k down took out an owner financing note for $112,000 and a mortgage for $743/mn Front home rented out for $1,200/mn and back home rented out for $900/mn (currently on the market for sale).

I wanted to give some feedback of our deals prior to digging in. So we have made the decision to move from California to Tennessee. My wife is pregnant in her 6th month, we have an almost 5 year old and so my dilema is I don't want to wait for our second child to arrive before we go into Multifamily. I know the potential of already having the deal under our belt prior to his arrival. I have the knowledge and skills for contractor work as I have been doing handyman work for the past 10 years, as well as learning the roofing trade with a professional company. Finally 3 years ago I made the bold move to go out on my own. I've been bringing in $400k worth of business but its not enough here in California that I keep to really make a difference. I still don't have my contractors license but have been doing the work as one should. Nevertheless, my question is the following: How do I run a proforma correctly so that from a distance I can run numbers and know I have an educated source calculated to make a deal happen and not fall through. I don't fall in love with properties as I would imagine all of you don't but rather look for the most cashflow a property can give us. I will be looking for a rundown multifam to BRRRR. I've never been to Memphis TN and I have looked at all the property using redfin, google maps, and I know I still need to fly out and drive all the neighborhoods.

Anyone reading this that has made purchases of multifam's in the Memphis areas please I would love to learn your process so I too can venture into that realm. Thank you all for your patience and feedback support!