All Forum Posts by: Janell E.

Hi Kim,

I came across your post because I'm looking for the same. Just wondering if you went ahead with Matt Hewitt? We own our property in an LLC and apparently we can't file without an attorney because of that.

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $850,000

12 units (two 6 unit buildings) bought with a combination of bank and seller financing. We only had to bring $40k to closing on this one. We brought on another partner who was instrumental in working with the seller regarding the seller financing portion of this deal. 2 units are vacant that need some moderate tlc that should be able to be tackled in a weeks time.

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

We've been looking for larger multi-family in the area for the past 8 months. We had 2 deals under contract that had fallen through during this time. It's in a good area of town and seemed like a great price.

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

We have a mutual CPA that knew we were looking and he committed to finding us a deal before the year ended... he found one within 2 months!

How did you finance this deal?

Combination of bank financing and seller financing. We brought $40k to closing.

How did you add value to the deal?

Planning to do some light rehab to units as they become vacant and increase the below market rents over time.

What was the outcome?

The appraisal came in at $25k over the purchase price. We closed only a few days ago, so still getting our bearings. One of the partners is going to air bnb arbitrage from the company, so we're eager to see how that goes. If it does well, we might consider short term/medium term rentals for the other units.

Lessons learned? Challenges?

Don't pick a closing company based on the fees they charge. Our closing was delayed a good 2 weeks due to mis-communications with the bank and people going on vacation.. that was thousands of dollars in rent.

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

No

Thanks @Chris Seveney, but an attorney would cost us more than if we just paid for the hotel.

A drain pipe disconnected in the crawlspace of a small apartment building. I noticed a musty smell upon doing my routine hallway cleaning (no tenants had complained of smell). Found water in the crawlspace that had resulted in mold that now needs remediation. 2 units need to vacate for 4 days during the remediation per the remediation company (to avoid cross contamination, vapors, and so they can air scrub the 2 lower units). Tenant has renter's insurance, but says it doesn't cover them staying in a hotel for 4 days. Tenant also says they wouldn't file a claim even if it did. We offered to deduct 4 days of prorated rent for the next month to help with hotel cost. Tenant says they don't have the money to stay in a hotel (nor family/friends in the area to stay with) and are not leaving unless we pay for them to stay in a hotel. 

Our lease states tenant agrees to allow us to take appropriate corrective action in regards to mold/mildew/moisture conditions. It also states we will not be liable to Tenant for any disruptions or inconvenience to Tenant as a result of damages or repairs.

I believe these are our options:

1) Pay for the hotel (caveat here is that one other unit has to leave during this time and is being very cooperative). I think if we go this route, we should also offer to pay for the other unit, so this option is a double cost.

2) Deduct the cost of the hotel from their security deposit and pay for the hotel (this avoids having to also pay for the other cooperative tenant's hotel too)

3) Tell them they are in default of their lease if we are unable to start the remediation as scheduled and file for eviction. I know this allows more time for the problem to worsen in the crawlspace, so I'm not sure this allows us to preserve the property well. 

Any other thoughts or comments are appreciated.

Thanks

I'd be happy to chat about it. I sent you a request to connect.

Yes, thank you! Exactly what I was looking for.

Hello, I'm about to get my first wholesale deal under contract. I have called all the local title companies and none of them will perform this type of closing. Does anyone have a closing attorney in the Saginaw, MI, Bay City, MI, or Midland, MI area that would assist in the closing process? Thanks in advance!

I messaged them about my frustration with the lack of notice and they gave me 30 days of pro for free. At least now I can get my tax info and see if pro is worth the cost.

I just now noticed it too. Wish I had downloaded my tax packages for all my portfolios already. I'm considering moving to something else if there's a better recommendation. Although, I do like how real estate focused it is. I also wish I would have had a notification that this was happening... maybe I missed it.

@Nicholas L. I asked my realtor in the area to ask her coworkers if they knew of anyone looking to sell. She sent out a mass email to the company and someone answered back that they had a seller with a 12 unit. Before it went to market, I was able to go view it and had an offer in that day. What is really crazy is that I had driven by the apartment buildings many times and every time I did I thought how awesome it would be to own them... and then one day we did! For that, my partner and I put up more than half the down payment and family investors put in the rest. We self manage and it's going really well :)

@Chris Seveney This deal is on pause. We found the investors, but the day we sent the PSA to him, the seller said he had some family stuff happen and decided to hold off on selling. He said he would let me know first when/if that changes. In the mean time, we found another 12 unit in Indiana that we now have under contract with the same investors that we interested in the deal that fell through. 

Lesson learned: even if a deal doesn't close, having potential investors already know what kind of properties you're looking, what kind of returns you're aiming for, and what your 3-5 year plan is can be really helpful when it comes to funding the next potential opportunity. 

Thank you to everyone who responded to this. I will keep these ideas in mind for other deals down the road.