All Forum Posts by: Jay Schultz

Hello everyone. Looking forward to the get together next week. 

@Bruce Runn wow - nice!

How did you find the deals?

Investment Info:

Single-family residence buy & hold investment in Shakopee.

Purchase price: $215,000
Cash invested: $65,000

This is a single family townhome. I bought it turnkey - with renter an everything.

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

I wanted to add a second property to my portfolio. My Realtor friend owned it. He moved out of state and wanted to do an exchange. So, I got it off market. It had been a good property for him and so I picked it up and inherited his tenants.

How did you finance this deal?

Conventional. Ended up having to put 25% down because it was classified as a condo and not a townhome - even though it is a townhome in practice.

How did you add value to the deal?

Turnkey.

What was the outcome?

First three months were BAD. Tenants stopped paying. Had to evict them. Needed an extensive cleaning, new paint, and some unplanned maintenance. Good experience. Blew 1 year of future cash flow! No way to predict that on the front side.

Lessons learned? Challenges?

Have enough cash for unforeseen issues. Not great - could have put that toward my next deal. But if I would have had to sell, to cover the costs, would have been even more devastating. Now, I just hope the current tenants stay for a while and I can dig myself out of the hole over time. And it will. Just sucks.

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

Owner was my realtor and friend.

Investment Info:

Single-family residence buy & hold investment in Shakopee.

Purchase price: $215,000
Cash invested: $65,000

This is a single family townhome. I bought it turnkey - with renter an everything. Ended up having to put 25% down because it was classified as a condo and not a townhome - even though it is a townhome in practice. To make matters worse, tenants stopped paying rent the month I closed. Needed to evict them...went to court, got writ, got 'em out inside of two months from the time I closed. But, lost three months rent and had to put a some cash into some unplanned fixes. Luckily, they didn't destroy the property - just left it a mess. Lots of learning.

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

I wanted to add a second property to my portfolio. My Realtor friend owned it. He moved out of state and wanted to do an exchange. So, I got it off market. It had been a good property for him and so I picked it up and inherited his tenants.

How did you finance this deal?

Conventional.

How did you add value to the deal?

Turnkey.

What was the outcome?

First three months were BAD. Tenants stopped paying. Had to evict them. Needed an extensive cleaning, new paint, and some unplanned maintenance. Good experience. Blew 1 year of future cash flow! No way to predict that on the front side.

Lessons learned? Challenges?

Have enough cash for unforeseen issues. Not great - could have put that toward my next deal. But if I would have had to sell, to cover the costs, would have been even more devastating. Now, I just hope the current tenants stay for a while and I can dig myself out of the hole over time. And it will. Just sucks.

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

Owner was my realtor and friend.

I share Justin's passion. And excited to BRRR my first property. Though, not going to quit my job for a while. :) However, I am in need of deals. I wish I was in Milwaukee where it sounds like the deals are all over. But, here in Minneapolis, there are not deals - or I am not in tune with what to look for (more likely the case). Thinking about driving for dollars. Or going to country records office for potential pre-foreclosures. Any ideas?

@Bobby Esposito I have the same issue in one of my homes.  Years of uncontrolled mice roaming the whole house.  I did a full upstairs remodel to "seal" them from 1st floor - but they still get in the home and run around the basement drop ceiling tiles, particularly before winter comes.  Finding the entrance has been very difficult.  But, I have found an amazing trap: Victor Electric Mouse trap.  Humane. Connects to wifi so I get a text instead of having to routinely check the traps. 

Investment Info:

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

Purchase price: $395,000
Cash invested: $22,000

This duplex was my first deal. I bought on an FHA loan and owner occupied one side for 12 months. Cashflow represents all budgeted expenses like vacancy, turnover, maint, etc.

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

I had always wanted to buy rentals (since 2002). However, nearly 20 years later the circumstances were right to finally pull the trigger. Better late than never.

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

Through my agent. This was a property that was on MLS and was re-listed as the buyers before me couldn't perform. It became available and I jumped on it. Rent on the one side is below market and I am slowly bringing it back to market. I didn't really do a good job negotiating...looking to improve my skills.

How did you finance this deal?

FHA

How did you add value to the deal?

No.

What was the outcome?

Still holding. Been a good property so far. Have had a some CapEx this year (New AC on one side, New windows on the other) and will need a new driveway eventually.

Lessons learned? Challenges?

Tradeoff between being nickel and dime by tenants and providing a good product. Always have done what was right to make sure property conforms to a high standard and is desirable. As such, my maint expenses are higher than I like. Because I am leveraged so much, quarterly cash flow fluctuations have varied - but so far have been above projections. After replacing the windows and AC this summer, that will be a big hit.

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

My agent was awesome. But he moved out of state and I have not found one that I really like.