All Forum Posts by: Richard Mercado

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $50,000
Cash invested: $53,370

SFH in Fayetteville NC.

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

The appeal of this property was that it was in a good school district and had strong appreciation potential.

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

Purchased from a wholesaler who originally wanted $54,000 but we negotiated it down to $50K.

How did you finance this deal?

Initially purchased this property with all cash.

How did you add value to the deal?

We spent $35K on a full rehab and added a 2nd bathroom making it a 3/2.

What was the outcome?

We refinanced 10 months later leaving about $4k in the deal. Almost a perfect BRRRR.

Lessons learned? Challenges?

A year and a half after the purchase we started having severe floor issues and discovered the underpinnings were in very bad condition. We ended up spending another $15K to fix the problem. lesson learned was to always have an insopection before purchasing. I could have potentially asked the seller for a better to deal to offset the cost.

Investment Info:

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

Purchase price: $118,000
Cash invested: $29,526

(3) SFH purchased as a package all on the same block in Fayetteville. I was initially looking for cashflow and didn't expect much appreciation, however they have nearly tripled in value and are still cashflowing really well.

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

We were initially looking for cashflow and didn't expect much appreciation, however the properties have nearly tripled in value and are still cash flowing really well.

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

Found this deal through my friends at Five Pillars in Fayetteville. It was essentially a wholesale deal.

How did you finance this deal?

Purchased with all cash. With the low entry price cash made sense. It would have been a challenge getting (3) separate loans for under $40K each at the time.

How did you add value to the deal?

Prior owner was a contractor who took excellent care of the properties so rehab was minimal, mostly cosmetic, roughly $10K per door.

What was the outcome?

The (3) properties have nearly tripled in value and are still cash flowing really well at $500/mo per door. zof course having no debt on these has really amped up the income.

Lessons learned? Challenges?

Lower cost properties tend to have a higher tenant turnover rate which has been a challenge.

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

Thankfully my friends at Alotta Properties Property Management in Fayetteville have been a huge support in filling vacancies and addressing issues as they arise.

Hi Evan , this one is in 27103 Hanestown area. 

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $60,000
Cash invested: $79,131

Purchased this SFR for $60K with a tenant in place paying $600/mo at the time. She moved out two years later and we did a full rehab which took way longer than expected (2 months turned into 8 months) Costs of materials soared and our rehab budget went from $40K to $75K. Interest rates also hiked up during the extended rehab eating into cashflow.

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

The low cost of entry and a great location made this an enticing investment. Was at 1% rule from day 1, however once we started the rehab two years later we realized just how much work was needed.

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

This deal was brought to us by an inspector from another deal we were considering. It was his Mom's property who was aging and wanted out.

How did you finance this deal?

Purchased cash, then refi'd two years later after rehab.

How did you add value to the deal?

Full rehab value add including electrical, plumbing, roof, HVAC, and added a 2nd Bathroom and laundry room.

What was the outcome?

Left $25K in the deal after the refi but was still a solid base hit. Currently renting for $1450/mo and the property has appreciated significantly.

Lessons learned? Challenges?

In hindsight I should have found a different contractor to get the job done quicker, however there was a serious shortage of labor at the time.

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

Brad Hunter at Hunter Realty and Property Management was a huge help in overseeing the rehab and placing quality tenants.

Investment Info:

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

Purchase price: $116,000
Cash invested: $113,207

Quad near Downtown Burlington, NC (One parcel with two duplexes). Rehabbed one duplex while one of the tenants in the other duplex relocated. The other tenant wanted to stay so we moved him into a unit in the newly rehabbed duplex once completed. Finished rehabbing the second duplex during the onset of covid and My GC lost most of his crew. We barely got over the finish line just as things were shutting down.

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

In an effort to scale moving up to 4 units seeemed to be a good next move. Burlington being in the path of progeess between Durham and Winston-Salem had a lot of potential.

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

This deal was brought to me by my property manager who was also a broker. It was a wholesale deal.

How did you finance this deal?

Initial financing was all cash. Refinanced in December of 2021 at an appraisal valuation of $313,500 (75% LTV). My first perfect BRRRR!

How did you add value to the deal?

Invested $100K ($25K per unit) in the rehab, down to the studs.

What was the outcome?

We still have this property. It has been a solid investment that is cashflowing and has appreciated greatly.

Lessons learned? Challenges?

Covid was the biggest challenge and the rapidly increasing costs of supplies.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $129,000
Cash invested: $36,000

SFH in Durham, NC about 1 mile East of City center.

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

Property was in great condition and in the path of progress.

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

Found it on the MLS

How did you finance this deal?

Conventional Financing at 3.375%. 25% Down

How did you add value to the deal?

Spent $36,000 on moderate rehab, mainly floors, kitchen and bathrooms

What was the outcome?

BRRRR ... Refinanced and got most of our capital out (left approximately $22K in the deal). We still have this property in our portfolio and plan on holding this one for quite a while ....

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

I would highly recommend Will Spence and his team at Highland property Management. He did a fantastic job of overseeing the rehab and had my back throughout the entire process.

Investment Info:

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

Purchase price: $136,000
Cash invested: $35,195
Sale price: $274,335

This Duplex was purchased at the tail end of 2019 with one unit remodeled and vacant. Located in a flood zone, the property was ultimately destroyed by a large 100' tall tree which crashed down onto the roof during a storm, practically dissecting both units. After paying Loss of Rents for a year, the insurance company finally settled considering it a total loss.

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

Was looking for small multi family in Durham which was poised for continued growth. This property was less than a mile from city center and was in the path of progress.

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

Found this on on the MLS

How did you finance this deal?

Purchased using a conventional loan 25% down.

What was the outcome?

Between the insurance payout and the sale of the damaged property we were able to net $103,140 on this one.

Lessons learned? Challenges?

Don't buy in a flood zone unless you have great insurance and are willing to deal with a lot of headaches!

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

Jesse Marinez at One Village Property Management was my PM. I would highly recommend his services.

Really well put together and insightful review Jared. Thanks for sharing!

@Carlos Paz - Hi Carlos -- I've done some deals with Five Pillars - great resource. Would you mind sending me a PM with those recommendations for a Portfolio lender near Fayetteville? Would be great to connect soon. Thanks

Thanks Ryan ... hopefully I can make it out there for that one.