All Forum Posts by: Greg Bates

Im in a similar situation. Your path forward will depend on your long term goals.

If you are focused on near-term cashflow, you may want to sell and 1031 the profit into your next deal.

If you are playing the long game, and are able to absorb the negative cashflow for the time being, you may want to keep the property. After 10 years, it is likely you will experience significant equity gains.

Investment Info:

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

Purchase price: $466,000
Cash invested: $150,000

First “actual” investment property. Huge duplex in amazing location. Quite distressed, tons of potential

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

Want to have financial independence by the time I retire from military in 6 years

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

Found on realtor, viewed ASAP, offered $15k above list next day

How did you finance this deal?

Local Credit union has loan product specific to small multifamily investments. 20% down, 5/1 ARM at 3% amortized over 25 years, balloon payment after 10 years. Used HELOC on primary residence for down payment. Used savings for rehab

How did you add value to the deal?

Needed very intensive cosmetic rehab. Replaced everything.

What was the outcome?

To be determined but optimistic

Lessons learned? Challenges?

This was an attempt to “get on base” with real estate investing. First property purchased that wasn’t primary residence. Felt like getting hit by a pitch but we are on base none-the-less. Previous owner created plenty of hurdles with sub-standard care but amazing potential

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

Kell and Company

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $465,000
Cash invested: $30,000

Current residence (fake address). Amazing home, meticulously maintained by previous owner who built the home. Way more than we wanted to pay at the time but in hindsight, a great investment

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

Found on Realtor.com, viewed it ASAP. Put in offer same day for $5k over asking.

How did you finance this deal?

VA loan, 3.26% 30-yr fixed. Refinanced 2 years later at 2.235%

How did you add value to the deal?

Used profit from sale of previous home to add 1BR apartment over garage. Remodeled master bath. Added mini-split A/C

What was the outcome?

Currently living here. Tenant pays more than half of mortgage. Location is great, home is amazing. Tons of equity.

Lessons learned? Challenges?

Sometimes, paying more than you want is worth it

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

Kell and Company

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $295,000
Cash invested: $10,000
Sale price: $325,000

Second real estate purchase. Suited our needs at the time but wasn’t in love with the homes

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

Found a great realtor through a friend of the family. Offered list with 5k seller contribution at closing

How did you finance this deal?

VA loan, 3.625% 30yr fixed

How did you add value to the deal?

Remodeled master bath

What was the outcome?

Sold in less than 1 month for $30k profit

Lessons learned? Challenges?

This was more of a “means to an end” property than an actual investment property

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

Kell & Company

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $145,000
Cash invested: $20,000
Sale price: $195,000

First home; used VA loan. Replaced floors and appliances, painted all the walls. Lived there for two years and sold when we left MN. Loved that house

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

Read Rich dad poor dad. The timing was right, the location was great and the price was perfect

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

Met my friend for golf and saw a for sale sign in the yard next to his. It was a short sale. Offered list with 5k seller contribution toward closing costs

How did you finance this deal?

VA home loan. 30- yr fixed, 4.25% interest

How did you add value to the deal?

Painted all the walls, replaced all the floors, replaced appliances

What was the outcome?

Sold 2 years later for $40k gross profit

Lessons learned? Challenges?

Circuit breakers don’t always make sense.