All Forum Posts by: Grayson Spittel

@Robert Shortsleeves do you find that when you get into larger houses (larger sq ft/more # of bedrooms), but still have the same size kitchens or bacthrooms (or close to the same size) as a 1,000 sq ft house, you adjust your forecasted $ per sq ft? My thought is that at some point, the kitchen/bathroom/fixtures of a 2,000+ sq ft house can't be THAT much more expensive than that of a 1,000 sq ft house. But, on the other hand, the floors/paint certainly does increase proportionately. 

Just a thought! 

All the best - 

Investment Info:

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

Purchase price: $665,000

Buy and Hold Short Term Rental Duplex - Private Money Partnership - 100% Other People's Money

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

In a crazy market, this Duplex sat for over 4 months because of a combination of too high original list price, deferred maintenance, and terrible pictures. All those things meant I couldn't stop thinking about it of course!

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

MLS

How did you finance this deal?

100% other people's money. I partnered with another individual through a private money agreement. They provided 100% of the capital for the down payment, rehab, and staging costs. I qualified for the financing, managed the rehab, completed the staging, and manage the day to day operations.

How did you add value to the deal?

I was able to research the market, find the deal, secure financing (15% down on a multifamily), find and manage the contractors, purchase and stage both units, and daily manage the Short Term rental.

What was the outcome?

While we purchased for $650k, we negotiated $30k in seller's concessions that covered a brand new AC unit and covered all but $5k of the rehab. Currently we are forecasting over $100k for the year in gross revenue. With minimal CapEx/Maintenance and no management fees, the return on investment is very very solid.

hey @John Faulk Jr you're in a great spot to start the investment journey and I love the huge goal. Fayetteville/Hope Mills is a great spot to be in and there are a BUNCH of other investors that are around you to learn from/work with. I'd suggest attending the local meet ups there - again, so many to choose from! Best of luck. 

Likewise, I live in Wake Forest and have rentals in Fayetteville, Wilmington, and Atlantic Beach. Awesome place to live - great blend of the country and the ease of being closer to the city. @Patrick Knapp @Phillip Bradrick we need to get together for lunch sometime - seriously

Hey @Brian O'Neill even if y'all don't close in July/August and it's pushed back to Q4 - in my mind - and not knowing your family makeup, that is not enough time to have a reason to buy a house, whether through cash or a mortgage, and then need to close on your other house following. You wouldn't live in it long enough to house hack and decrease your eventual capital gains tax, you would need to act very quickly/time it right, and you are going to change your debt picture regardless. I would suggest finding a month to month rental or Airbnb until your house is complete. Then, from there, you can operate from a position of strength and time without any time constraints. 

 Hey @Graham Wilson Jr great question - this kind of policy is a limiter to the desired purpose you would want to have with your investment property. If you have a four unit quadplex, and want to make all four units of the property be short term rentals, you would be unable. If evaluating a property based upon being used as a short term or long term rental, the return and calculation is going to be COMPLETELY different. I.E if you're needing all four units to be short term rentals in order for a deal to make sense, but can only rent out 2 of them, then you are in a bind. I just had a friend who bought a Condo for short term rentals at the beach, fixed it up, staged and rented it out for a month before the HOA came and shut him down as their Rules & Regulations did not allow rentals under 30 days. These kind of restrictions are very important to know about before you purchase a property.

 Romeo - based upon that definition you could have 2 of your 3 units. "whichever is greater" refers to it can either be 25% (i.e 25% of a 12 unit would be 3 units) or two dwelling units.

@Julia Taylor hey Julia - Delayed Financing is done on the value of the property after repair value ARV. The best way that you can do this is to even wrap your rehab costs into your initial cash purchase statement. This allows the shortened seasoning period and also allows you to get back 80% (for a SFH) of the ARV during the cash out refinance. Finding an investor friendly lender - not a Wells Fargo - and they'll be able to assist with that. In regards to making sure that you qualify for the refinance - the only issue I can see you run into, so long as you don't have a horrible credit score/DTI, would be making sure that your lender doesn't have a minimum loan value. I've made cash purchases before, where naturally most people are looking at cheaper houses in order to afford that kind of purchase, where the ARV after being fixed up was below $100k appraisal value when some lenders for instance won't make loans below $75k. Easy fix though if you run into that, just find another lender. And with today's market, much harder to find a house that isn't worth $100k afterwards! Good luck.

@Justin Lee what market is this in? Are you using any software to help manage?

@Manthan Patel hey! Just by using “Fayetteville” in your post you have about 50+ people who have keyword searches set up. Great market. Great part of the larger local market. I would suggest finding a local investor friendly agent who can tell you details of specific properties or wholesaler lists and go from there.