All Forum Posts by: Hayden Bowles

Same tenant, now paying $9,000/m on a new lease. Home is worth $1.5-$1.6m

Much appreciation to all the replies on here! Definitely helped with a sense of direction, biggest thing being specifying the legal side of things. Speaking with a proper attorney on Monday to make sure things are going to be correct. 

I should have clarified on some parts just to give a little more context. All investors are close friends of some kind, and we are not talking about 20 people. 5-6 is going to be the number, I will be an investor myself.

There isnt going to be some webinar or big pitch. All investors will be people I know personally who are familiar in some way with my other properties and have trust in me doing it on a larger scale. I made a presentation just to put together the numbers and make it easy to read.

As for the question by Jonah, great one to ask! I've been building relationships for a few years now. This deal was an off-market one from a brokerage that I have a distant relationship to. They manage a few hundred million themselves and are going to actually take a small stake of this deal as a GP which will be a great help. This is definitely not a business you can do alone! The warm introductions is very important. Property management, lenders.... for everyone. Networking is key. I definitely appreciate all the feedback on here and will provide value where I can.

The only things that could hold up this deal will be revealed in the next 48 hours. Number 1 being the legal side, speaking with the attorney tomorrow on that. Number 2 being the debt side. Can do an easy 3-year interest only at 3.5% with an option to extend up to 2 more. but trying to push for 5 with an option to extend. This is a 3-5 year hold and I don't want to be pushed prematurely into a position to exit or do something not in the plans. I want the longer term peace of mind and ability to play the waiting game. Current cashflow is nice, and I know what the rents should be. Confident we can do very well on that alone. 

Other than that, just gotta raise the capital. LOI accepted, PSA being drafted. I'll either proceed forward and my earnest goes half hard upfront, or walk away. Just depends on those 2 variables. I'll keep you guys posted. Again, the feedback and kindness is much appreciated

Hey I just wanted to put this out there to get any advice or experienced opinions! I have built up a small portfolio on my own and am now getting under contract for an 88-unit deal for $8.65m.

I will be raising capital for the first time ($2m of it) and am piecing together the whole structure. It's going to be a standard LLC, not a fund, just for this one deal. Technically all partners will not be limited, but the operating agreement will spell out the specifics and make sure people cannot get voted out.

I would love to hear any advice from anyone who has raised capital! My debt is in place, management is in-place, off-market deal lined up.... it's all ready, now I am just raising the cash from my close inner-circle.

Rents are decent, fairly close to 1% already (I'll hit 1% after raising rents). Simple value add play, very confident I can bring the NOI from $427,000 to $550,000+ in a few years. Should be a nice double on the equity with cashflow along the way, buying it at a 4.9% cap.

Debt is going to be 3-year interest only at 3.5% with 2 separate 1-year options to extend. Then will either exit or place on longer debt with a cash out refi.

I've done this on a small scale many times (never a commercial loan). The deal doesn't scare me at all, this is super solid. But the specifics behind bringing in capital and operating with a larger amount of money just makes me want to be extra cautious since it's not only my money. I have funds out of my own pocket going hard to get the deal under contract.

A quick post for anyone who is moving towards getting their first property! It's been almost 2 years since I bought my first Single Family rental, and upon reflection I cant stress how important it is to just jump in and do that deal. It doesn't need to be a home run. But putting yourself in the arena and taking that first swing is an important step. A lot of it is just psychological, and you'll realize how it's really not that big of a deal to buy a property.

Trust me, my first deal was nothing to gawk at. It was a decent looking single family home for $405,000 that cash flowed at maybe 5% tops. But I was extremely confident in home values and increasing rent prices due to the high influx of new jobs and population shift (this home is in Arizona). After almost 2 years, I can now get about $900/m more than when I bought it, turning this into a cash cow that has also made $125,000+ in additional equity. Regardless of the new equity, the cashflow alone makes this a deal I would do a thousand times over.

I have since bought 4 additional properties & am hunting for an 8-16 unit at the moment. I just cant stress enough how important that first one is. It gets you over the hump and fired up about it! The info on BiggerPockets can easily help you get there, so so valuable.

I'll post some deal breakdowns soon!

Investment Info:

Single-family residence buy & hold investment in Mesa.

Purchase price: $890,000
Cash invested: $140,000

Rented out my personal home when I didn't need it anymore. (Only started it as a rental in January of 2021). 6 bedroom (+ office), 5 bathroom. 6,100sqft on 1 acre.

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

Was a personal home for myself, also stole it at the time. Great price and the previous owner was in a rush to sell after a divorce.

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

On the market for only a couple days. Was touring homes and saw about 15 over a 3 day period. This was the first one on the first day and I fell in love with it. Knew it was underpriced too in comparison to what I saw. Offered list price and got like $5,000 in closing costs covered

How did you finance this deal?

Standard 30 year fixed, 3.3%. Mortgage is $4,001

How did you add value to the deal?

Painted the whole inside, new carpet and a few small things which completely changed the feel of the home. Was very "early 2000's" feel with brown walls and stuff.

What was the outcome?

Great equity gain, and now a rental at $6,500/ on a 2 year lease with 1 year paid in advance. Plan from purchase date is a 3-5 year hold. I believe homes like this in Arizona in a good area will be worth 1.4-1.5M+ in a few years. Compared to Colorado, Utah, Idaho.... etc, they are all seeing similar growth. In comparison to California pricing too (would be 2+ Million there). Theres no way this doesn't get close to that, it's just so much house for the money right now.

Lessons learned? Challenges?

Honestly I thought it would take a few months to get a tenant in there. Had someone signed, paid and keys in hand within 9 days which blew me away. Good amount of applications. Upon reflection, theres not a lot of rental homes in this price range. Supply & Demand I suppose.

Have played around with the idea of high end AirBnB. Maybe some day :)

Investment Info:

Single-family residence buy & hold investment in Gilbert.

Purchase price: $390,000
Cash invested: $80,000

Another single family home. Newer construction, only 6 years old and super nice. 4 bedrooms, 3 bath. 2,600sqft

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

Confident in the rental market and growth of the area. Also really liked how new the property was. At least 5-8 years before anything remotely major is going to need serious attention.

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

Fresh to market, my agent knew the seller. Gave them list price at 390 and got like $4,000 in closing costs covered.

How did you finance this deal?

Standard 20% down, 30 year fixed. Rate is like 3.5%

How did you add value to the deal?

No value here, just an instant rental

What was the outcome?

Great tenant in place for the first year who just renewed their lease. Honestly, they are $200+ under market value but I told them I will never raise their rent as long as they stay (my incentive for good tenants to stay). The tenants are truly wonderful, makes things super easy. Home is currently worth $450,000+ with similar comps sold on the same street for that or above. So great equity gain and will continue to hold, nice piggy bank for a while.

Investment Info:

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

Purchase price: $375,000
Cash invested: $105,000

My first "multi-family". A duplex. Value add deal, as one unit was trashed and not livable. Goal was to renovate, add value and hit 10% Cash on Cash.

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

Great learning experience, that was number one. I was also extremely confident in the rental area and knew what I could get. There was a lot of learning points here. 1 unit trashed, the other with a month to month tenant. So lots of angles to learn from. Renovations, raising rents, dealing with 2 units... was super fun!

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

My agent brought it to me, was a fresh to market deal and he knew the other agent. Had to actually work in a basic deal for the seller to spend $2,500 to make the other unit livable so I could get the financing. $375k closing costs and got most of my closing costs covered

How did you finance this deal?

20% down, 30 year fixed. Currently 3.3%, mortgage is $1,516

How did you add value to the deal?

Renovations on both sides. Rents bumped from $1,200/side to $1,500/side a month and 1 year leases in place. Gross rents of $3,000/m

What was the outcome?

I don't plan on selling, so outcome is just cash flow. Although I did refinance when things hit the fan and rates dropped. Extra cashflow from that. Property is worth $475,000 , so I could have pulled out roughly my originally $100k and had a BRRRR property. I chose not to pull out the cash. Just letting this one sit for now and bringing in strong cashflow

Lessons learned? Challenges?

Have to stay on top of renovation crews. 2 weeks turns into 2 months real fast for a renovation

Investment Info:

Single-family residence buy & hold investment in Gilbert.

Purchase price: $405,000
Cash invested: $26,000

First property I bought, goal was to breakeven here while putting the smallest amount down. Appreciation in this area is nuts. 2-3 year hold. Currently appraised at $475,000.

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

good way to get my feet wet, it was slightly under market value in the 2nd rated neighborhood. Was confident in the growth and the rental, even though rental income is nothing crazy.

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

On-market, new listing. Multiple offers but I offered list and got closing costs negotiated

How did you finance this deal?

30 year fixed, standard 5% down on my first personal property (yes I spent time in this property personally - house hacked). Bought it solely with the appreciation intention and knowing it would be a rental

What was the outcome?

$70,000 equity gain in the first 12 months, now it cashflows a few hundred a month. Goal here is a 2-3 year hold.

Lessons learned? Challenges?

Single family like this is boring. Probably won't be doing it again, but great way to get my foot in the door and I got value out of living in the property for a period of time (house hacked).

Hey Kailey, would love to connect! Im a 20 year old business owner and I invest in real estate out here in Arizona on the side (just 4 properties currently). Im fairly new into all of it myself and have definitely had to jump through some hoops. I think it's super cool that you want to get into real estate, not a lot of people in the younger crowd do :)

Lets connect, would be more than happy to answer any questions you may have.