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All Forum Posts by: Mike Williams

Mike Williams has started 22 posts and replied 63 times.

Post: Duplex subject-to BRRRR

Mike Williams
Pro Member
Posted
  • Rental Property Investor
  • Canton, GA
  • Posts 64
  • Votes 14

Investment Info:

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

Purchase price: $90,000
Cash invested: $30,000
Sale price: $152,000

Duplex subject-to BRRRR. I took over the payments subject-to the existing mortgage, with the understanding that I would be responsible for the rehab costs. Then, the plan was to refinance the property, pull my money out, and move on to the next deal. It didn't quite go exactly to plan, but almost. However, I learned a ton!

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

I was interested in moving into the multi-family space. I own (and manage) 3 single family rentals, and thought a duplex would be an easy next step.

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

I sent letters to multi-family property owners in Coweta County, and received a handful of calls back. One guy was motivated and I pursued it. I was able to negotiate a subject-to deal because the guy was pretty desperate. He was terrible at managing the tenants, and one of his tenants had cause about 20K of damage to the unit. He had house-hacked it back in the day, but now had wife and kids and just wanted out.

How did you finance this deal?

It was some creative financing and I also brought in personal cash. I did what's called subject-to on this deal - purchasing the property from the guy "subject-to" the existing mortgage. So, no money down, and I was responsible for the fix-up costs. I took over the existing payments to the bank, and I solved the seller's problem of not having the cash to fix the property.

How did you add value to the deal?

It's a duplex and one side was completely trashed by the previous tenant (about 20K) worth of work needed. While I was rehabbing one side, the tenant on the other side moved out, so I went ahead and fixed up that side as well. I was all in for about 30K.

Short list of rehab work:
Floors (lvp & tile), paint, new siding, updated appliances, water heaters, furnaces, concrete sidewalk, interior & exterior doors, new fixtures + more.

What was the outcome?

I was able to raise rent about $200/mo. per side. And I was able to refinance the seller out of the subject-to deal within 6 months. My intent was to buy and hold this property (which I'm doing) and it cashflows about $485/mo. after all expenses. My expenses include management fees even though I'm managing the property.

Lessons learned? Challenges?

Even if you have to pay a little bit more, hire a contractor that's going to get the job done in a reasonable amount of time. I saved some money hiring a handyman to do most of the work, but I lost that money in holding costs (more if you factor in vacancy/lost rents). Also, since there aren't very many multi-family properties in this county, the appraisal process was really hard b/c comps weren't there. Lastly, I was only able to refi out 70% on multi-family. I did the math using 75%. Ouch.

Post: Southside EEE - REIA

Mike Williams
Pro Member
Posted
  • Rental Property Investor
  • Canton, GA
  • Posts 64
  • Votes 14

@Gerard W Peters - We’d love to have you! Each meeting is different, so I can’t guarantee the topic will revolve around distressed properties. But I’m confident that you’ll have some take-aways, and that you’ll meet some great investors. Hope to see you there!

Post: Southside EEE - REIA

Mike Williams
Pro Member
Posted
  • Rental Property Investor
  • Canton, GA
  • Posts 64
  • Votes 14

@Kayla Strozier - Ok, great! See you there.

Post: Southside EEE - REIA

Mike Williams
Pro Member
Posted
  • Rental Property Investor
  • Canton, GA
  • Posts 64
  • Votes 14

The goal of this group is Encouragement, Education, and Experience (EEE). This local REIA meets each month at the IHOP in Fayetteville, GA. There are investors of all ages and experience in attendance, and we'd love to have you!

*No fee if it's your 1st time in attendance. It's a whopping $2 after that.

Post: Southside EEE - REIA

Mike Williams
Pro Member
Posted
  • Rental Property Investor
  • Canton, GA
  • Posts 64
  • Votes 14
Originally posted by @Bret McKee:

Hello Everyone,

I'll be there tonight.  I'm new to real estate investing, but have been doing my homework with BP Podcasts & books.  I'm excited to learn, meet new people, and make things happen!!

 Excited to have you joining us tonight! This is a great group, and there's always helpful nuggets to take away. Looking forward to meeting you.

Post: Southside EEE - REIA

Mike Williams
Pro Member
Posted
  • Rental Property Investor
  • Canton, GA
  • Posts 64
  • Votes 14

@Michael Sawyer - Great news! Looking forward to having you with us, Michael.

Post: Southside EEE - REIA

Mike Williams
Pro Member
Posted
  • Rental Property Investor
  • Canton, GA
  • Posts 64
  • Votes 14

@Kayla Strozier - Glad you discovered this group! Yes - we meet monthly, but I don’t yet have the March date yet. Usually I’ll have at least the next 2 meetings on here. We also have a Facebook group “Southside EEE - Real Estate Investing” that you can join. We keep the meetings on there too. There aren’t a ton of our attendees on BP yet, so sometimes FB is a better connector. Looking forward to seeing you in the future!

Post: Southside EEE - REIA

Mike Williams
Pro Member
Posted
  • Rental Property Investor
  • Canton, GA
  • Posts 64
  • Votes 14
Originally posted by @Pierre Ifill:

I'm looking to come also. I'm a RE Closing Attorney and new RE investor. 

 Great! I don’t know if many (if any) closing attorneys in the group. You’ll be a much needed/wanted perspective. Looking forward to seeing you! 

Post: Southside EEE - REIA

Mike Williams
Pro Member
Posted
  • Rental Property Investor
  • Canton, GA
  • Posts 64
  • Votes 14
Originally posted by @Heather Melton:

I plan on coming to this.  I'm new to real estate and want to learn as much as possible!

 Hey Heather! Looking forward to seeing you there. It's a great group, and I'm confident you'll learn something :) 

Post: Southside EEE - REIA

Mike Williams
Pro Member
Posted
  • Rental Property Investor
  • Canton, GA
  • Posts 64
  • Votes 14
Originally posted by @Ladarius Eatmon:

Will be there

 Looking forward to seeing you there!