All Forum Posts by: Hilary Stalder

I JUST closed on a flip I had a lot of money into and am looking to buy my next deal. This time I'm looking for a cash flowing, long term hold to rent out. I found one that needs some rehab but will cash flow, HOWEVER there is a potential snag... there is an existing tenant, with no lease, that pays under market rent (about $400 under market). The listing agent said they are willing to sign a lease if the carpet gets changed out. I'm asking if they would be willing to pay more (currently paying $1000, market rent is $1400 for this property). I'm worried about the implied lease since they've been there for 15 years and also not sure I want to inherit a tenant... 

Anyone have experience with dealing with a long term (15 year) tenant with no lease on a property they're buying? What are the options/laws and is this a GO or NO GO? Would especially appreciate feedback from Floridians that are familiar with our state's tenant/landlord laws specifically related to implied leases. 

Thanks!!

Investment Info:

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

Purchase price: $303,000
Cash invested: $50,000

My boyfriend purchased this house as a buy and hold/house hack. It's a little over 1500 sf duplex, each side about 750sf 2/1 units and it is a major fixer upper! We bought the house at $313k and did 3% back in closing costs to maximize cash in hand. The renovations will cost between $40-50k and are mostly maintenance/cosmetic (roof, add AC, flooring, counter tops, paint, trim, doors, etc.). We have a good list of reliable subs that will help us get this done.

We're hoping to have it up and ready for rent by August time frame at which point we'll also move into it. We're expecting the rent out the other side for $1350/month which will cover all but $600 of our mortgage. This will allow us to save exponentially more than ever before! Once we live in it for a year we will find something else to live in and rent out both sides for a cash flow of $300+/month.

The duplex is sandwiched in between two new builds and is also in an up-and-coming area of Winter Park, close to downtown Orlando and major highways (I-4), but also next to all that WP has to offer. Long term we'd like to build new. Once we own the land outright we should be able to build a luxury duplex such as the one next to us to either sell or rent, depending on which makes the most sense at the time. This is a 15-20 year plan.

Investment Info:

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

Purchase price: $303,000
Cash invested: $50,000

My boyfriend purchased this house as a buy and hold/house hack. It's a little over 1500 sf duplex, each side about 750sf 2/1 units and it is a major fixer upper! We bought the house at $313k and did 3% back in closing costs to maximize cash in hand. The renovations will cost between $40-50k and are mostly maintenance/cosmetic (roof, add AC, flooring, counter tops, paint, trim, doors, etc.). We have a good list of reliable subs that will help us get this done.

We're hoping to have it up and ready for rent by August time frame at which point we'll also move into it. We're expecting the rent out the other side for $1350/month which will cover all but $600 of our mortgage. This will allow us to save exponentially more than ever before! Once we live in it for a year we will find something else to live in and rent out both sides for a cash flow of $300+/month.

The duplex is sandwiched in between two new builds and is also in an up-and-coming area of Winter Park, close to downtown Orlando and major highways (I-4), but also next to all that WP has to offer. Long term we'd like to build new. Once we own the land outright we should be able to build a luxury duplex such as the one next to us to either sell or rent, depending on which makes the most sense at the time. This is a 15-20 year plan.

Investment Info:

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

Purchase price: $303,000

Cash invested: $50,000

This duplex is a little over 1500 sf duplex, each side about 750sf 2/1 units and it is a major fixer upper! We're hoping to have it up and ready for rent by August time frame at which point we'll also move into it. We're expecting the other side to rent for $1350/month which will cover all but $600 of our mortgage. Once we live in it for a year we will find something else to live in and rent out both sides for a cash flow of $300+/month.

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

The endless options. The area is great and close to everything, but we were still able to find a small multi-family with numbers that worked! Both of us were interested in getting into the buy and holds, and this seemed like a great property to start on. PLUS we will be landlords in the easiest sense of the word, the tenants will be next door. A great way to get our feet wet in the landlord business.

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

MLS, it needed a lot of work so negotiating was not difficult. An investor owned it before so he was very straight forward with what he wanted. At the end of the day he was able to get the price he wanted and we were able to walk away with a good deal. Property was listed for $340k we walked away at $313 with $9k in closing costs, basically getting the property for $303k.

How did you finance this deal?

We did a 5% down FHA loan. We bought the house at $313k and did 3% back in closing costs to maximize cash in hand.

How did you add value to the deal?

We're doing a major renovation. We're fixing it up to the level we are okay with living in and betting that translates to top of the line rents/renters. The renovations will cost between $40-50k and are mostly maintenance/cosmetic (roof, add AC, flooring, counter tops, paint, trim, doors, etc.). We have a good list of reliable subs that will help us get this done. Long term we may build new.

What was the outcome?

Stay tuned...

Erica,

I agree with the above. I do live in Florida and my boyfriend and myself are about to house hack here (kind of similar to the situation you described above with your girlfriend). We're in the central Florida area, Orlando/Winter Park. Would love to connect though and keep in touch for when you're closer to looking to move. Would love to help however I can even if that means steering you to a different market. :) 

Hey Amir! I'm in Orlando and it's definitely tough to find something here that makes the numbers work. I haven't had personal experience, but have heard some good things about Jacksonville. Let me know if you need a good agent recommendation. Would love to help however I can!

Hey Michael! I'm in central florida (orlando) near UCF. UCF has some affordable properties near oviedo by it. My mom and I actually just helped another investor buy a SFH near that area. Message me if you want to talk further. I'd be happy to chat. :)

@Juan Carlos Castillo thanks so much! Put a lot of blood, sweat and tears into this one! Good luck!

Investment Info:

Single-family residence fix & flip investment in Altamonte Spg.

Purchase price: $102,000
Cash invested: $20,000
Sale price: $169,000

Large kitchen renovation and guest bathroom renovation. Overall updates including new paint, carpet, doors, door hardware, and trim. Lived in the house during the renovation to avoid capital gains tax.

Kitchen - took down wall to make open concept to dining and family room
2nd bathroom - full renovation, new marble, fixtures, toilet, etc.
stairs - replaced carpet with hardwood
New paint, doors, trim and hardware throughout

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

This was my first home. I knew I wanted to take on a renovation and this was a great first deal!

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

At the time I only wanted to own a property. This was the best property I could find that I could afford in a good area, just a stone's throw away from a VERY upscale area.

How did you finance this deal?

FHA 30 year loan

How did you add value to the deal?

Complete renovation, see details above.

What was the outcome?

I made a lot of money on this deal. I walked away making about $30k after fees.

Lessons learned? Challenges?

I realize now that I timed the market really right on this. Although I made money I spent money that I didn't need to: hardwood stairs and marble in bathroom. I loved the outcome of this property, but will not make the same mistake of overspending on finishes. I was lucky to time the market right and walk away with such a good profit.

Investment Info:

Single-family residence fix & flip investment in Winter Park.

Purchase price: $285,000

Cash invested: $40,000

Single Family home 4-2, 1800 sf in Winter Park, FL. Significant structural renovation to kitchen to achieve "open concept". Infill hardwood floors, new tile in family room, new carpet in master, total master bathroom renovation. Drywall added to laundry room. Selling later this year (for a full year homestead / long term capital gains) and into late next year. Goal is $30k-40k profit.

Before and After Pictures attached.

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

I really wanted to do a major structural renovation with permitting, inspecting, and manage everything myself. It was very rewarding to see this home come such a long way.

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

I found the deal shortly after it came on the market. I liked the layout of the house and thought with some small changes the mid-century with the vaulted ceilings could easily become more "modern". I thought right and estimated slightly wrong! I won't make as much as I thought on this deal, but it's currently on the market.

How did you finance this deal?

It's my homestead so 30 year FHA loan was the best monthly payment.

How did you add value to the deal?

Major kitchen renovation - took down 2 walls and completely changed the layout/opened it to other areas
Master bathroom - enlarged shower and complete gut, changed location of toilet to add space in master bath
2nd bathroom - new floor, cabinet, fixtures, refinished wall tile for new look
laundry room - finished the walls and added floor tile
Paint inside and out
New trim and door hardware

What was the outcome?

It's on the market as of January 2019, I'm writing this post February 2019 and it's been on the market for 3 weeks with lots of interest.

Lessons learned? Challenges?

I almost had an offer the first weekend it was on the market. The feedback I keep getting is people are worried about the roof. Next time I will overestimate my interior renovations and save money for major systems like the roof and HVAC so it can comp with other completely renovated homes. Major regret = not doing roof.

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

I'm representing myself on this deal.

See profile for full before/after.