All Forum Posts by: Frank Avallone II

ahh darn. Might not make too much sense to do that then. Have you gotten some sort of pre-approval from a lender yet for these deals? I am a lender myself but I am not currently licensed in WV where I believe your profile says. Is this where the properties are located? 

Welcome Matthew! You are definitely in the right place. I'd love to connect!

Glad to hear that you guys have the support in place! This should definitely make things a little less risky. I'm assuming you meant lower the down payment right? What is your current living situation if you don't mine me asking? Only reason I ask is because if you guys were living with family or renting for example then maybe you can temporarily live in one of these properties as an owner occupier. Then from a lending perspective, the one you guys move into wouldn't be considered an investment property and you can put as little as 3.5% down. You probably have heard of this as "house hacking" in other forums. It's a great way to get started and lessen the cash exposure initially. 

I definitely agree with a lot of the other replies. Keeping your raises consistent to avoid and issues is very smart. What I try to do is make sure I'm raising rent slightly year after year for inflation. If you do this then after a few years time like your current situation, you won't have to "shock" the tenant with a large increase. Since that is only advice for moving forward, I would recommend making sure you are 100% on your evaluation on current market value. If you know this is accurate and you are confident then you could always raise the rent to market value and have a talk with the tenants about why you are doing so. This might help them justify the raise and they may stay with you. If you are only raising them to market value then odds are going elsewhere won't save them much money. If they do leave then just make sure you screen your next potential tenants thoroughly. Calling past landlords/ employers and of course running credit and background check. While this doesn't guarantee they won't be problematic it will help. Hope this helps!

Hi JonPaul, this usually comes down to personal preference. I know some bigger investors that will say they prefer to deploy all their money as doing so makes more money quickly. Personally just for peace of mind I like to actually keep a 6 month reserve for each multi family I buy (I know this is the slower way to scale). Now doing this for the past 5 years, there has definitely been times that unexpected costs or vacancies come up. If these occur and you have no money to fix them.. it may cause problems. Now another factor is income outside of the investing. If you and your wife have jobs with good, almost "guaranteed" income, then maybe you can get away with it and quickly save up after the initial investments. Another factor is truthfully your network and family. If one of these unexpected costs or even vacancies come up could you turn to someone for help? I'm very curious to see other investors opinions as well!

@Kaylee Walterbach Surrounding your self with the right people. Having a solid team you can turn to for help and advice is super important. I also think after doing your initial due diligence diving in and getting started is really how you learn. Going through the process yourself teaches you more than you can learn through just research. Then as others have mentioned once you get through some "hurdles" these hurdles will be easier down the road and you'll have the confidence to push forward!

Investment Info:

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

Purchase price: $429,000
Cash invested: $10,000

First buy and Hold Property I ever did!

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

Always had an interest in Real Estate Investing

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

Through a realtor, negotiated by leveraging the negative aspects of the house discovered in the inspection.

How did you finance this deal?

Through a lender.

How did you add value to the deal?

Cleaning up the units and landscaping.

What was the outcome?

Been a great investment!

Lessons learned? Challenges?

Screening all tenants thoroughly is a must! Organization is key!

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

Chris Coranato as my Realtor

Investment Info:

Single-family residence fix & flip investment in Newton.

Purchase price: $150,000
Cash invested: $100,000
Sale price: $341,000

First Time Flipping a home! Learned a lot about the process. Prior to this my investing experience had been all buy and hold investing.

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

Great opportunity to help a neighborhood and make money doing it.

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

Through a real estate agent.

How did you finance this deal?

Hard Money and Personal Money

How did you add value to the deal?

Redid the entire inside and outside of the home.

What was the outcome?

Great outcome! Learned a ton and made money doing so.

Lessons learned? Challenges?

Hiring a great contractor is a must. Job took much longer than expected. Learned to be much more strict with all hires in the future and set deadlines.