All Forum Posts by: Harold Felder

Thanks @Steve Katuska.  After each successful rehab & rental, her, her husband, myself and my wife have a debrief/celebration dinner where we discuss what went well and what we could improve on going forward.  I am going to take that opportunity to be open with her about my concerns.

Thanks @Paul Neeb.  As @Marc Law suggested, I have been driving around neighborhoods and started sending postcards to apartment buildings that I thought were interesting or looked in disrepair.  But this then brings me to the question of what do I do if one of them calls me?  Do I try to proceed with the deal myself or do I reach out to my agent.  I've never done a deal myself and quite frankly I don't know what I don't know.  I am afraid I may miss something that may cost me big.  

Point taken @Marc Law.

I appreciate your input @Damion Byros.  If she is comfortable with representing me then I think I am going to move forward with her.  However, I plan to ask a lot of questions so that I am comfortable with the fact that she is comfortable representing me as I move into larger investment properties.

Thanks @Russell Brazil.  I will definitely have that conversation with her.

Thanks for your reply @Steve Vaughan.  Her experience has been residential and I do know that the fouplex was a little different for her although she did a great job.  I am looking to purchase something in the range of 12-40 units.

Thanks @Peter MacKercher.  You made points that I've never considered.

Hello BP Community,

Background:

I currently have a real estate agent who has brokered all of my investment as well as personal real estate purchases. This includes the 3 SFH and a fourplex that I just completed rehabbing. She is also the property manager for all of my properties and has done a good job of filling vacancies and maintaining my properties. I trust her. Moreover, her family and my family have become close over the years.

Dilema:

I am looking to move up in the multifamily space. When I read articles here on BP as well as books and even listen to the gurus, they either imply or outright say that I don't need an agent to make first contact or even negotiate apartment deals. They say that I should handle that myself. I've also heard that using a realtor, particularly on larger deals, would only slow down the negotiating process and introduce another layer of communication that could cause misunderstandings and confusion.

I am a newbie and wanted to get feedback from the BP community on whether I should continue to use her or start negotiating deals myself?

@Mark Nolan

I have a self-directed 401k and that is an option I would consider for the right opportunity.

Sure Steve,

My wife and I had basically saved some money when we got a letter from our real estate agent telling us of a property that she knew of that was for sale for 20k. We had that much saved up and decided to jump in. The house was in horrible condition. The person living there had inherited it and performed no upkeep. All the utilities where turned off. Before we closed on the house, a kerosene heater he was using started a fire. Although fire is never a good thing for properties, it worked in our favor since we lowered our asking price to 12k. It was basically a 3/1 gut job. We ended putting in around 20k to get it rentable but we have been renting it out to the same tenant for $750 a month for the last three years. We got a line of credit from our credit union to finance the repairs.

Once we paid off the line of credit, we purchase our second home for around 24k. We financed with a combination of the remaining line of credit and a low interest credit card. It was a 3/2 which cost us around 13k to fix up. We have been renting that out for the last two years for around $800 a month.

This year we bought a fourplex for 91k. I tried to finance it but ran into all kinds of issues. Lenders could not decide on how much it was worth. I didn’t want to loose the deal so I decided to take a loan against my 401k along with my wife who borrowed against her 401k. We rehabbed it with a combination of the low interest credit card and line of credit that we paid off from our first property. The fourplex was really run down so we had to put in about 50k to get it rentable. The rents were previously $375-$425. We are now getting $740-$790 a month. Two units are already occupied. The tenants for the other two units will be moving in within the next week or two.

So, although I say we own the properties free and clear we do have to pay back the line-of-credit, low interest credit cards & 401ks. I guess maybe I should have said that we don’t have mortgages on the properties. That would probably be more accurate.