All Forum Posts by: Jacob Larsen

Hey Mark!
I have had good experience with hawkeye title company. Compare to a couple of other places I checked they ended up costing less and did good and quick work.

-Jacob

Hi Bobac,

Congrats on finding this deal and scaling up in units! That is ALWAYS exciting!

In my opinion, and take if or leave it as you wish, what is fair to your partner is mostly irrelevant so long as you are both happy with your rate of return. You are getting $10k for free for agreeing to manage the property. 
Is that, combined with the cashflow enough ROI to be worth it to you?

If so, then you should proceed. If not, then ask for more. 

I personally will not entertain less than 12% ROI after including property management costs at 8% of the gross rents. If the ROI is greater, then I pull the trigger.

Also, I am assuming the property is cashflowing $1000 a month and your 50% position is $500 and that is after paying property management (in this case, yourself)? If it is only $250 or if you have not factored in property management into your cashflow I would offer less money.

Of course no one has a crystal ball regarding the future, but if history is any indicator, things will be stable here in Iowa. Aim for less leverage and greater ROI deals to manage the risk if you feel uncertain about RE in the near term.

Best of luck!

Jacob

Investment Info:

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

Purchase price: $102,500
Cash invested: $110,000

It is a fixer-upper, but fully rented out and cashflows 300 a month. Good entry-level property

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

looking for multi-family in Cedar Rapids

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

on MLS, listed for 124,000. Made an original offer for 92,500. Seller came back at $105,000. The thing was run-down and had bug infestation. I used the seller's agent who talked him down to $102,500. Have put around $9,000 in to get the mechanicals and curbe appeal up to

How did you finance this deal?

cash equivalent. Won't be able to do that much going forward

How did you add value to the deal?

new deck, front entry stairs, new landscaping, removed weed overgrowth, exterminated pests, fixed some siding and roof damage, fixed clogged plumbing, replaced fixtures, improved drainage, added structural posts and reinforced basement joists.

What was the outcome?

happy tenants. Cashflowing.

Lessons learned? Challenges?

It is annoying having your money tied up for 6 months. Next time I may just finance my deal

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

Yes. Jonathan Doerrfeld. Very good person and agent

Perfect! You rock Joseph!

Thanks for your answer Joseph! Do you recall what the mg/hr rating was and did you deploy it when things demo'd to the studs or after the rehab was complete?
Thanks in advance!

Anyone have experience using an ozone generator for removing fire smoke smell?

Hi Kaleb,

Welcome to BiggerPockets and the world of real estate!
Both methods will work if you set your mind to one of them and then work at it.

That said, personally I would get a job, preferably rehabbing or doing property management or something real estate related, start looking for deals on the MLS and practice putting in low-ball offers, and save up the 5-7k first and then get an FHA loan and buy after months of saving up and practicing finding deals.
The reason for this is that the learning curve is steep at the beginning: you have to learn how to identify a deal, run the numbers, how to make an offer, learn your market comps, etc. and then you will have to learn how to rehab advertise to renters, show the unit, prepare a lease, etc. etc. once you have purchased the property.

Throwing in the extra work required to put together a deal package for a hard money lender when you have no previous deals or resources to back it.... It just adds to the learning curve and has a low probability of success due to you having no track record at this point.

I'm not saying it's impossible... It obviously has been done and will continue to be done by some... but I would not recommend it to someone brand new

My two (or three) cents...

-Jacob

@Nate Roelfs That is good to keep in my back pocket for custom sized windows. Thanks for the tip!

@Bob B. I  would, but I have DIY restrictions currently in place from my wife ;)

@Josh Neuhaus Thanks! I have heard good things about them on a Wisconsin post. Your post reinforces that. I will schedule something with them.

Does anyone have a recommended window installer in the Cedar Rapids area? I have 12+ windows that are standard sizes and need to be replaced. I have read widely different prices for installed window cost and don't want to overpay or waste time.
Any recommendations?

I remember a couple years ago when I visited the Linn county Sherriff's office, they had a list of foreclosures along with all of the prosecutors, all of the defendants, the amount owed, etc. You could try calling them on Monday to see if they have one.