All Forum Posts by: Garrett Tierney

@Matthew Olszak wow, now this is an awesome tip! I am constantly having to decide between HD (2 mins from my house) and Menards (15-20 mins from my house) this is going to make that decision quite a bit easier. Thank you sir!

@Marcus Holloway it sounds like you are happy with how this one turned out. I recently completed a 4-unit 203k with a renovation over $80k so I understand the additional red tape of dealing with a 203k consultant alongside your GC. I agree with you entirely on the idea that paying the consultant to come out for inspections and to sign off on draws for work completed is well worth the cost, especially if you do not have alot of experience with renovations! Despite the negative connotations surrounding 203k loans because of all the rules you need to follow, I believe it is a very powerful and relatively risk-averse strategy for new investors. Am I correct in assuming your down payment was 3.5% of the $123k purchase + renovation cost? If so, I'd like to know how much (if any) cash flow the property produces for you annually. As far as cash on cash return, I don't know if there is a better investment vehicle than a 203k for new investors. 

Think about this, Marcus may be all in to this property for, let's say, $4.3k down payment + $2.7k closing costs for an initial investment of $7k (let's work with round numbers here). If this property even produces $100/month in cash flow, you will see a 17%+ cash on cash return and have made your initial investment back in less than 6 years! For a buy and hold investor this is truly an awesome way to acquire properties, force equity, and see great returns all while you are learning and being shielded in a sense by working with a consultant to ensure the renovation is completed to acceptable standards! Great work @Marcus Holloway, if you get some time and can provide a little more feedback on your experience and the performance of the property I think everyone would benefit from learning more!

@Jesse Byrer and one other question I had on the deal, are you continuing to cash flow $750 (minus vacancy and expenses) even after the refi? That's a pretty killer deal if so.

I see, I'm very familiar with the area. I am driving up and down Belmont all the time, I know I've seen a dumpster or two in the driveways of a few houses along the stretch just south of Maple I probably saw yours! There are some homes that are pretty far set back off of Belmont there that still give you the advantage of being close to the train station while getting a little relief from that traffic, nice find. Did you have difficulty finding a pool of tenants to rent the home? I know there aren't too many homes available for rent in DG, but I could see there being demand with proximity to the train.

Hi @Jesse Byrer , this sounds like a killer deal nice work! Basements in the SW suburbs are very coveted and you definitely made the right call by spending there and having all the major mechanical systems replaced. You truly cannot put a price on peace of mind.

Was this property located in the Downers Grove North or Downers Grove South high school district? I ask because I attended Downers Grove North and have had eyes on that DG single family market for some time now. I have not seen very many foreclosures pop up and if they do come on the MLS they still seem to be priced well above the $135.5k figure you pulled off. I assume based on the renovation figure, the house was in pretty bad shape but I am curious about the amount of BD, BA, and SF you got for this price, could you give some detail on the configuration of the house itself?

Good luck with your current project!
 

If you are looking for some deep discounts and not too particular on exactly the style or product you are looking for, I highly recommend checking out some of the Habitat for Humanity Restore locations with an open mind and a tape measure! You can find a location local to you at this link . 

I was able to do 3 kitchen and 3 bathroom glazed mosaic backsplashes for $1.50 per 12" x 12" sheet. I bought all 30 sheets they had and found the exact same product at menards for over $6.00 per sheet, pretty awesome deal!

Sometimes you may not find what you are looking for as their inventories are always changing, but typically it is a great place to get very cheap doors, flooring, light fixtures, trim, even appliances and furniture. I can say from experience that the Aurora location at Fox Valley Mall is one of the largest I've been to and usually always has a great selection. These places are a bargain/treasure hunter's paradise and your purchases go towards helping Habitat do good in the community.

I know this is no secret, but Menards 11% off everything has been going on for months now since COVID and can get you a good amount of money back if you are diligent about sending in your rebates (it is worth the 5 minutes it takes to fill out and put in an envelope, despite the complaints that you will hear so often about how much of a pain it is).

Good luck with your BRRRR!

@Bill B. Great advice on the thought process behind a higher deductible plan. Less claims, lower premiums as long as you budget responsibly to cover unseen expenses. Insurance agent is advising on liability coverage, I'm seeing coverage recommendations ranging from $250k-$1M.

@Eric Carr Thanks, makes great sense to give the tenant the OPTION to cover their personal belongings with renters insurance, rather than a requirement which may turn some prospective tenants off. From personal experience in college of living with a roommate and his dog, I'm fully aware of the inevitable damage that pets can cause, so I will heed the advice and make renters insurance mandatory with a pet, as well as a pet deposit.

@Bill B. Thanks for the feedback, much appreciated. Yes, I spoke with a Liberty Mutual representative and he suggested pursuing a landlord policy (will most likely build in some vacancy protection), not covering personal belongings, and require tenants to get renters insurance. 

This is my first time purchasing an insurance policy myself, anyone able to provide a 'best practice' number on reasonable deductible and liability coverage amounts?

I'm in the process of closing on two duplex's on one lot. I'll be owner-occupying one unit for the first year of the mortgage, and plan to move out and rent all 4 units thereafter. 

I'm required to have insurance on the property in order to secure financing, and wanted to see if any BP members could provide some experience-based input on whether to seek out the additional protection provided by a Landlord Insurance Policy (slightly more expensive) or a Homeowners Insurance Policy. Thank you in advance, for your feedback!

First time home buyer under contract on a 4-unit Fannie Mae foreclosure. I just received the inspection report on the property and there are some serious items that need to be addressed (primarily plumbing and electrical). It's a great opportunity to get 4 units at 5% down that would cash flow nicely once the property is renovated. I'm trying to convince myself that this inspection report is not a deal killer but I want to remain objective in this process. What advice can you provide regarding the inspection process and how it affects your judgement on whether or not to move forward with a deal? Thanks guys, I can't get enough of the real estate podcast AND the Money podcast. Cheers!