All Forum Posts by: Ike Hobbs

Now is not the time to be asking those people...terrible advice imo. 

 You can sell w/tenants in place but that's at least a 45 day process and nobody is going to be able to get a loan if the lender knows that the line is collapsed. They'll make it conditional on it being repaired. Selling isn't really an option here. 

Yeah I plan on having a property manager in the next 4yrs but for now I can manage most things myself. It was a 2bd 1bth house with detached ADU 1bd/1bth. I posted it on my profile here. Location is on McCormick. Not ideal but it's very close to Newman and Friends. I purchased for 136k and seller paid my closing costs. I did a 7.5% down conventional loan.

If you're utilizing the house hack and low downpayment, I wouldn't think you'd have any issue hitting that target for a Cash on Cash or IRR. I just got one last month that had been on the market for awhile and after moving out it's around 13% when estimating 10% Vacancy and 10% management fee, both of which I won't be paying on for a bit.

Do you have a good agent? I had one that was really good at looking at on the investment side and would be happy to recommend. Come over to the WAREI group sometime when you can. 

Investment Info:

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

Purchase price: $136,000
Cash invested: $10,200

Small house with detached ADU in backyard. Buying as a house hack so was able to get a conventional loan and use this as my primary residence.

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

After finishing my last BRRR, I had my lease coming up for renewal in the main city I have to live in for my W2 Income. Realized it would probably be cheaper on a monthly basis to have a mortgage there rather than pay rent for another year.

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

Bought off the MLS. Negotiated a small price decrease due to it being on the market for 60+days and also had seller pay 3% closing costs.

How did you finance this deal?

Conventional financing. Was going for a 5% down loan but last minute had to adjust it to a 7.5% down but still a pretty minimal cash layout.

How did you add value to the deal?

This is one of the few value-add-less deals I'll do. This was more about me being able to use residential eligibility for a long term hold rather than pay rent each month.
In the future, I think both the large house and the ADU have great potential for AirBNB or Medium Term strategies. Decent location for this and the layout would be perfect. If I don't go that route though, moving out in a year and renting out at market rates will still be a decent return.

What was the outcome?

So far so good.

Lessons learned? Challenges?

Had some challenges with financing last minute. Partly due to the lender failing on some stuff, firing their processor and having to redo a lot of things last minute. This increased my down-payment amount and also axed some of the stuff I was hoping to save on but in the end it still worked out.
Next deal like this I'll probably just double-double check that I have more cash ready to go than needed, even when the lender says it's all good to go.

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

Absolutely recommend Jake Henderson on this. Wasn't really planning on using an agent but he had showed me a couple deals and so was happy to go into this with him. He proved helpful at several points and the expertise was appreciated.

I use Ashley as my broker. She's been good. 

Investment Info:

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

Purchase price: $50,000
Cash invested: $30,000

First BRRR property. Purchased vacant duplex across the street from a current investment. Rehabbed most of the stuff myself except for supply lines in the plumbing. Took a bit longer than hoped but didn't go over my estimate by more than a couple weeks. Expenses also went over by about 5k so that was doable.

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

Wanted to try a BRRR and have no cash involved. Also wanted to buy this property as it was a board up directly across from my first investment property so by improving it I helped the neighborhood values and keeping the area up.

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

I had actually sent a letter and tried to call the owner several times on this. Then an agent in the area approached me because they knew I was looking in the area and they knew the owner's nephew who had inherited it just recently and wanted nothing to do with it.
Funny thing is that the agent saw how much I liked it and tried to buy it herself but then last minute her money fell through so she came back to me and I had 2 weeks to buy it before probate got involved.

How did you finance this deal?

Hard money for the purchase price. Personal loan for the rehab. If you read my summary you can see how this worked out.
Then refinanced into conventional after rehab at 6 months.

How did you add value to the deal?

Hauled out the trash, stripped the carpets, kilzed everything. Put new PEX supply lines in, repainted everything, rebuilt some windows and repaired others. New AC units due to the existing units being stolen the day of closing. New LVP flooring put down. Bathtubs refinished, shower walls replaced and new hardware. New fixtures. Sanded cabinets and repainted. Overall mostly cosmetic items.

What was the outcome?

A fair out come. Would like to have cashed out more. Would rather not have to spend so much time myself on the next project. I pretty much spent the last 3 months of the project working on it day/night.

Lessons learned? Challenges?

Lessons learned:
1. Contract out more of the work. Doing it myself took to long and holding costs/time probably cost me more.
2. Don't get distracted with the whole project when working on a specific task.
3. Figure out a better refi. I had hard money for the purchase and got a personal loan for the rehab (half the interest rate). However when refinancing I was not able to get that personal loan included in the cashout.

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

Hard money lender was great and I'll use him again. Refinance lender was ok and I'm actually using them again for a house hack but I don't think they'll be a top of my list for another BRRR refinance due to their restrictions.

Investment Info:

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

Purchase price: $50,000
Cash invested: $30,000

First BRRR property. Purchased vacant duplex across the street from a current investment. Rehabbed most of the stuff myself except for supply lines in the plumbing. Took a bit longer than hoped but didn't go over my estimate by more than a couple weeks. Expenses also went over by about 5k so that was doable.

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

Wanted to try a BRRR and have no cash involved. Also wanted to buy this property as it was a board up directly across from my first investment property so by improving it I helped the neighborhood values and keeping the area up.

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

I had actually sent a letter and tried to call the owner several times on this. Then an agent in the area approached me because they knew I was looking in the area and they knew the owner's nephew who had inherited it just recently and wanted nothing to do with it.
Funny thing is that the agent saw how much I liked it and tried to buy it herself but then last minute her money fell through so she came back to me and I had 2 weeks to buy it before probate got involved.

How did you finance this deal?

Hard money for the purchase price. Personal loan for the rehab. If you read my summary you can see how this worked out.
Then refinanced into conventional after rehab at 6 months.

How did you add value to the deal?

Hauled out the trash, stripped the carpets, kilzed everything. Put new PEX supply lines in, repainted everything, rebuilt some windows and repaired others. New AC units due to the existing units being stolen the day of closing. New LVP flooring put down. Bathtubs refinished, shower walls replaced and new hardware. New fixtures. Sanded cabinets and repainted. Overall mostly cosmetic items.

What was the outcome?

A fair out come. Would like to have cashed out more. Would rather not have to spend so much time myself on the next project. I pretty much spent the last 3 months of the project working on it day/night.

Lessons learned? Challenges?

Lessons learned:
1. If I had contracted out the work it would've probably cost about the same due to holding costs in the winter, time off from my job and general focus I had to put into it.
2. Don't get distracted with the whole project when working on a specific task.
3. Figure out a better refi. I had hard money for the purchase and got a personal loan for the rehab (half the interest rate). However when refinancing I was not told until about a week before that closing that I couldn't ref

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

Hard money lender was great and I'll use him again. Refinance lender was ok and I'm actually using them again for a house hack but I don't think they'll be a top of my list for another BRRR refinance due to their restrictions.

@Mark Canton should be your guy. Local and experienced investor. 

I've been looking around the market for the last year and getting more serious as it looks like I'll be moving up there here soon for a career advancement. Cashflow seems to be king, some appreciation is happening but that's definitely not the main attraction. There's been a lot of growth, especially WEST which has an entirely different vibe than how I remember it when I moved out of Wichita 7 years ago. Most people seem to recommend not investing in the plainview area and a couple of other neighborhoods but kinda depends on what you're going for. There's an ICT Real Estate Investors FB group that you might find helpful. Also @Jason Lavender hosts a lowkey lunch every month that's pretty good for networking if you're wanting to meet people. Good luck!