All Forum Posts by: Jake Lilly

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This would be my first BRRRR. Seller inherited the house after a death in the family. I already offered 50k cash, + closing costs + brokers 3% commission. The offer was made prior to being listed. The seller declined because she has to split the inheritance 3 ways, and wants to see how the week goes with showings after being listed. I believe that the will be listing for around 75k-80k, which I think is too high with what all needs done, but quite possible for someone who wants to slowly make improvements on their own gradually. It's possible she comes back to reconsider my first offer. 

I believe the ARV is accurate but I can't be positive. At first I thought it to be conservative, but the sq footage of the house says only 672sq ft. I also over estimated costs, since this will be my first BRRRR and I have never flipped a home. 

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This property is in a decent location, the only issue I have is this house is 100 years old. However, with a little TLC, I know this 2 bed 1 bath house could rent for $800/month.

@Jaron Walling I have made some low offers on a couple single family homes that have been turned down, but am beginning to see what you are saying. The MLS is difficult tool to use for finding deals right now. I have mailed some property owners, and spoken on the phone to a couple. I probably need to be more aggressive in putting in the work to locate leads and pursue them in some way or another.

I am a relatively new investor, looking for deals in a town of about 60-70k. After my wife and I bought our first rental property in 2019, we purchased a duplex in 2020 and currently live on one side while the other side covers our monthly mortgage payment. I'd love to purchase more multi-family properties (duplexes, triplexes, even 4-6 unit buildings). Currently I am sitting on a lot of cash (to me anyway), halfway waiting for the opportunity to purchase a couple more duplexes on our street (I think the owner of a couple will possibly sell within the year) and looking for other deals all the time. There are a lot of single family homes for sale with the potential of cash flowing, but I'd like to get into multifamily. However, multi-family deals in decent areas get sold almost immediately after being listed (not only in town, but surrounding areas as well), and most of the single family homes that will cash flow well are much older than I would prefer.

My question is, should I continue to sit on cash and wait for/pursue more multi-family deals, or should I buy what I can with what I have at the right price in order to start getting a return on my money instead of letting it sit in a bank. 

I don't have any investing mentors, so I'd be curious to see what some of your opinions are, and how you've found your best deals/investments.

Thanks

Though I am relatively new, I try to keep it as simple as possible for the tenants. With that being said, as long as they pay on time, I am open to cash, check, money order, electronic transfer, etc. My current tenants pay with check and money order. As I grow and obtain more properties/tenants, I intend to look for more efficient/streamlined ways to collect/deposit rent.

It has gone about as easy as I think a rental could. I have a great Tenant who takes care of property, about to sign his 3rd 1yr lease! 

@Kaylee Walterbach, what has contributed most to my leap into multifamily is getting over fear. I let the fear of "what could go wrong" set me back for several years when I could've been building my investment portfolio. I decided to stop talking about it, and instead, start taking action. 

Investment Info:

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

Purchase price: $255,000
Cash invested: $52,500

This is a duplex that my wife and I found, and are currently living in while renting out the other half. 3 bed, 2 bath, 2 car attached garage. We found this and began playing around with numbers. Being slightly over 20 years old, it didn't need much work. I knew that if we put the standard 20% down, we'd have a good chunk of equity built up right off the start, and we'd also have enough, or close to enough, rental income from the other unit to cover our mortgage.

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

We wanted to begin covering as much of our monthly expenses as possible with investment income, starting with what our rent payment was each month. This made sense to us because it would enable us to live mortgage free and save more money to invest in more properties. Rental Income brings in $1195/month, and whenever we decide to move out, we will Cashflow about $1150/month, without any improvements to the property.

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

Zillow. The owner was a real estate agent, so negotiating was difficult. However, we made the deal work out and it was close enough to what we were planning on spending for the property.

How did you finance this deal?

Conventional Loan as a primary residence, with 20% down @ fixed 3.125%.

Lessons learned? Challenges?

I could've put less down in order to have more cash available now.

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

Yes. Jim McMillian in Saint Joseph, MO is a great, personable, seasoned real estate agent.

Investment Info:

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

Purchase price: $255,000
Cash invested: $52,500

This is a duplex that my wife and I found, and are currently living in while renting out the other half. Each side is 3 bed, 2 bath, 2 story, 2 car attached garage. We found this on Zillow at first, and began playing around with numbers and decided to take a look at it immediately. Being slightly over 20 years old, it didn't need much work. Based on my projections, I knew that if we put the standard 20% down, we'd have a good chunk of equity built up right off the start, and we'd also have enough, or close to enough, rental income from the other unit to cover our mortgage.

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

We wanted to begin covering as much of our monthly expenses as possible with investment income, starting with what our rent payment was each month. This made sense to us because it would enable us to live mortgage free and save more money to invest in more properties.

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

Zillow. The owner was a real estate agent, so negotiating was difficult. However, we made the deal work out and it was close enough to what we were planning on spending for the property.

How did you finance this deal?

Conventional Loan as a primary residence, with 20% down @ fixed 3.125%.

Lessons learned? Challenges?

I could've put less down in order to have more cash available now.

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

Yes. Jim McMillian in Saint Joseph, MO is a great, personable, seasoned real estate agent.

Investment Info:

Single-family residence buy & hold investment in Saint Joseph.

Purchase price: $63,000
Cash invested: $13,000

This was my first deal/negotiation, purchased from another group of investors. I was looking for a property that didn't require too much repair, (as my time is limited) but just enough that I could do the small stuff and increase rent right away. Put around $9500 down, covered closing costs, and had around $500 in repairs. Vacant upon sale. I increased the rent and filled the property within a month.

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

I didn't know exactly what I was looking for. All I knew was that I was tired of looking at properties for the last few years and wanting to take action, but never actually getting anywhere. I had passed on a house these investors were selling and regretted it, so I knew it was time to act. It didn't need major repairs, and based on the numbers I was running, I knew I could use a minimal amount of money and get a decent monthly cash flow.

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

A friend's father in law owned rental properties, and as he was beginning his real estate exit, he was beginning to sell each of his properties as leases came up. As far as negotiating, I walked through the property, and had an idea of what I thought it was worth based on the a few years of researching and the current market. We negotiated a price over the phone while I was at the firehouse. They started at $67k, I started at $62k, and we came to $63,500.

How did you finance this deal?

Conventional Loan with 15% down @ 3.875% fixed rate.