All Forum Posts by: Jaston Robinson

Investment Info:

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

Purchase price: $325,000
Cash invested: $50,000

We purchased this deal from a wholesaler with intentions to flip it. However, while rehabbing the property we pivoted and decided to keep it.

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

Cash flow. After rehab and refinance we are expected to clear about $1,500 a month in cash flow.

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

Whole sale deal from local whole saler.

How did you finance this deal?

Hard money

How did you add value to the deal?

Adding an ADU and fully rehabbing the property

What was the outcome?

Added it to our portfolio and we now have great cash flow coming in monthly.

Lessons learned? Challenges?

We learned how it was to work with multiple contractors at once. We gained more experienced working with the city of Providence.

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

I represented myself during this transaction.

Quote from @Joe Bean:

Hey Jaston, how are you planning on incorporating the commission to be more attractive to the deal? I feel most sellers get stuck on the actual purchase price and would like to see a higher price. I suppose it depends on how they interpret and what you are offering. You also have to rely on the other agent if you are dealing with and “on market property” to deliver the deal the correct way to the seller.

 Hey Joe, 

This particular case, the seller is going through a bankruptcy so there are a lot of different angles here. I'm considering using my commission to secure the property and win over the realtor. Maybe splitting it with the listing agent etc. I'm just looking of more ways to for offer to stand out.  

Quote from @Ryan Lesley:

Hey @Jaston Robinson, 

I am also considering this for a current investment property that I am looking to purchase with my partner as well. Ill share what info I've come across so far, and hopefully others will chime in and confirm this. 

The feedback I have received so far is that you can but that you still have to take into consideration any splits (brokerage, team if applicable) and taxes on the commission. 

other than that my understanding is that, and I would speak with your lender and CPA about best option for applying it to the deal, you can use it a few different ways: lowering the purchase price by what your commission would be (after splits if applicable), using it to buy down interest rate and/or towards closing cost, or just pocket it and use it to fund your capex fund or towards any rehab. 

Again how you use it is going to depend on your tax situation, if there are any splits you have to consider, and what in the end makes the most sense and is the most advantageous to you for the deal. 

hope that helps and best of luck 🤝🍀

Hey Ryan, 

Thank you for your response. You're point about touching base with my CPA for the tax advantages is great advice and frankly I didn't't even think of it. 

I'm interested in your suggested about just using it towards cap x. That's also a great suggestion, thank you

Hello BP. 

My partner and I are representing ourselves and want to craft a competitive offer for an on-market deal. As a way, to be more completive we were considering of using our 2-3% commission as a negotiating tactic. This is our fist time doing this so we wanted some feedback.

Lastly, is it possible to apply your commission towards the down payment amount ?

Thank you

Investment Info:

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

Purchase price: $370,000
Cash invested: $18,000

We purchased a 4 unit in Woonsocket, RI and updated 3/4 units along with the of the property.

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

We invested in this deal specifically for cash flow.

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

Retail buy

How did you finance this deal?

Traditional lending

How did you add value to the deal?

Saving money buy applying a massive amount of sweat equity.

What was the outcome?

We are currently cash flow positive and using those funds for the next buy and hold.

Lessons learned? Challenges?

We learned its okay to do some sweat equity, however you have to get contractors involved at some point.

@Colleen F. Hey Colleen, she's asking 600k which would be the the ARV of this particular property. We are going to offer 400k so we can be competitive to secure it before it hits the market. She is looking to rent while she relocates to a condo. That's great advice, we plan on really highlighting her being able to stay when we present the offer to her today. Wish us luck!

@David M Trapani Hey David! current rents are about $2k roughly. Some vacant & other well under market. We absolutely can improve the property & do some updating. No rent control & market rents are looking about $1,200 x 6 units = $7,200 monthly. That's how we got an ARV of about 600k. Thank you so much for this advice. If our offer is accepted we'll putting a lot of this into action.

@Anthony Thompson She is asking a heavy 600k for the property. However, due to the income & repairs needed she is open to lower offers. We came to the conclusion that 600k would basically be the ARV so naturally we're going to offer significantly less. Current rents are at about $2,000 & Central Falls has a cap rate of 10.35%. Some units are vacant & others are well under market. I believe this can be a deal because the seller has many pain points. First, she's gearing up to retire, she has an older uncle she has to look after who is a horder & lastly, she is being pressured by the city to do some immediate repairs, which she doesn't have the capital to do. I think all of this building up will make it easy for her to take our offer along with the seller financing.

My partner & I are also re-crafting our offer. We are now offer 400k with 30 year fixed at 4.875% and seller financing the 20% at 3% for 10 years. We think this works for us because we are intending on holding this property for many years. What's your thoughts on that offer? is it fair? are we being too generous?

Hello BP I recently came across a lead in Central Falls, Rhode Island. This deal is two 3 families on one lot (Cant NOT subdivide). These buildings are completely paid off & have been in the seller's family for almost a century! Little maintenance however, there are some big capital X (siding one house, 3 unit rehabs, potentially hard wire smokes in each house & a junk clean out). My strategy is BRRRR, is that the best plan?

The seller's situation: she is gearing up to retire & would like to use the money from the houses to put towards a condo else where. She also does not have the ability to do the updates to make the house market ready. Lastly, she is requesting to staying & pay rent for 3 months while she finds a new place to live. 

My questions: First what are y'all over thoughts & advice? How can I get an accurate purchase price for this property where I'll be able to refinance into a low interest loan after the rehab? What will that refinance look like? & how does the seller get paid off? How can I combine seller financing & other forms of financing to make this deal happen? 

Thanks in advance

@Jeffrey Edwards

Absolutely, I’ll make sure to reach out to some local credit unions. What have typical seasoning periods been in your experience ?