All Forum Posts by: Jeff Hornberger

@Miriam De Haro

Sorry that happened to you, it’s frustrating for sure. I’ll say $1250 is better than the alternative had that been stolen just a few days after you bought the home.

Or let’s say had your lender closed on time you would be out the cost of an entire AC unit. It sounds like the seller extended the closing so you could get financing (which is always frustrating for a seller). And because they extended the closing for you it prolonged their inherit risk of holding a vacant house. And it sounds like ultimately they are paying a heavier price knowing it will cost much more then $1250 plus they had mortgage and utility cost to hold the property through the extension.

Your agent should be advising you on walk throughs prior to closing, so you may need a new agent but I wouldn’t go filing anything as overall you ended up on the better side of the coin on this deal.

Best of luck!!

@Dustin Crawford I might be bias because I purchased a duplex 12 years ago for my first purchase but I can say that it was the single best thing I could do financially. I used an fha 3.5% Down loan, lived in one side and then a couple years later refi’d that into a conventional loan then bought another duplex with fha (bigger for our growing family and closer to where I wanted to be). After these two duplexes were purchased I was able to move out of the larger one and cash flow my single family residences mortgage payment. I don’t think this would have been possible had I bought a single family home. The cash flow on those just isn’t what a duplex can be, atleast in my area.

I think if you run the numbers it will be easier to cash flow Multifamily and in the long run it will be easier to qualify for more properties as you’ll likely have more income and established leases to show income.

If there aren’t very many duplexes in the area you want to be then that tells me a direct mail campaign to those duplexes wouldn’t be all that expensive so maybe giving that a try for a couple months first to see if you can generate anything off market for you to buy and if not you ultimately sacrifice for a couple years then buy closer to where you want to be. 🤷‍♂️

Im having an issue with my BP notifications where i'm not getting notified via SMS text when someone messages me.. Ive got my notifications turned on in my iphone for the BP app and the box is checked in my setting on BP that ask if I want to receive SMS alerts when ive got a new message to read.. Anyone else have this issue.. Its been a long time since i have been notified via SMS like almost a year id say. Thanks in advance for any input!! 

Investment Info:

Single-family residence fix & flip investment in Spokane Valley.

Purchase price: $97,000
Cash invested: $117,000
Sale price: $246,000

The strategy with this property was to take a 19,000 sqft lot and split it into two parcels. We would sell the parcel with the house and keep the vacant lot that would we would then build a duplex on. The goal was to break even on the house including all costs to split the lot. We ended up losing $1200 on the flip but ended up with a lot and will be building a duplex in the coming year. The lot is approximately worth $70,000 as it sits.

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

Our long term play has to been to acquire rental property. This opportunity presented the ability to flip the house and end up with a free and clear lot where we could then build a duplex.

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

This lead came from facebook. We posted a different flip and she messaged us if we would be interested in coming by the house to make an offer. We negotiated it according to the end goal in mind which was to at least break even on the flip and end up with the lot.

How did you finance this deal?

We obtained private money for the purchase of the property and we fronted the rehab costs.

How did you add value to the deal?

By short platting the property from one lot to two lots. The left over lot is zoned multifamily as well.

What was the outcome?

We lost $1200 on the flip and ended up with the lot free and clear that is valued at $70,000.

Lessons learned? Challenges?

This was the first time we split any property up. Ive learned a lot about that process and the time it takes.

@Serena Tillman, Im going to second a few comments on here and suggest looking at your home base first. IF NJ is home, then start there and really dive into that market to start out. You'll quickly begin to learn what is important to you. Also, In doing this you'll begin to develop and also realize the importance of having the right team around you and you'll likely begin to really define your goals which will shed more light on which market is best for you. Then if you decide you need to look at other markets you'll have the experience you need to develop a team out of state.. I might be biased as I am a property manager & Agent myself but having a good property manager is crucial. The best property managers will run through your goals/projections for the property then help you execute that strategy. A good agent will collaborate with your property manager in finding projected rents. Be careful in your selection of your agent. They should know how to run the same numbers your looking at and ideally they too will have invested in the market your looking in. Leveraging experience really helps when your looking to buy your first rental property. Im biased as I live in Spokane, WA but looking at markets like Spokane can have a lower barrier of entry and they're typically "cash flow" markets where appreciation isn't the main goal as much as consistent cash flow is. Investing in markets like this can be a safer route in a housing market that may be seeing a shift. Good luck!!

For what it's worth I am a property manager here in Spokane and its my personal opinion that Rentometer can estimate pretty high. They are always consistently higher then I would have estimated, I think everyone looking to buy multi-family property should consult with a property manager if they are unsure on the rates.. I help people all the time with estimating these on purchases, happy to do the same for you @Jeffrey M. feel free to PM me if you ever need. 

Hey @Ben Freeburg, I'd be happy to chat with you about what we can do for ya.  Ill send you a message so we can connect.. Thanks @Karl Krauskopf!

Here's a triplex that is within 5 minutes of the GU Campus. Two of the units are 2 bedroom and 1 bath and the other is 1 bedroom 1 bath. The property sits on a large corner lot and has carport parking to the west. The siding is brick and roof was installed 10 years ago an has a 30 year shingle on it. Some updates are being done to 1003 including new kitchen floor, and fully updated bathroom. Units always rent quickly and retain tenants due to the convenient location and the size and layout of the units. Washer and dryer are included, Landlord pays W,S,G. Plenty of upside in rents with minor cosmetic updating. Call Jeff Hornberger for questions and for a copy of the Proforma. 

@Deanna Joy, @Brody Jett, Thanks guys for your responses. Much appreciated. Wanted to follow up and let you know what I found out.. Last week I reached out to commercial lender and had them ask their underwriting dep't if they would see any issue with underwriting this deal and he said they wouldn't have any issues as they would be listed as a loss payee if the place were to ever burn down etc.. I did call Melissa at the city planning dep't and she was really helpful. She actually shared a law with me that stated that even if the property were to burn down a future buyer would still be able to construct a 5 unit building because it had legal non-conforming use permitted. So really there is no concern on this any more as I see it. It did raise a bunch of questions but I think I got them sorted out it looks like.. 

Thanks again! 

HI BP friends, I need some insight. Im currently about to list a 5 unit apartment building for sale in Spokane WA. The property is an ex adult family home that has been converted 10 times over. It sits on 2 acres and located right behind this property are apartments. The seller swore up and down it was zoned multi-family etc but when I did some homework on the zoning it actually turned out that it was zoned single family and that currently it has a non-conforming use granted on it allowing it to remain a 5 unit building until someone rebuilds or if its destroyed and one had to rebuild. They would only be able to rebuild a single family home. Im guessing this will be a sticking point for any lender because they will no longer to be able to build a 5 unit building should something major happen to the house.. Does anyone have experience with this type of a scenario. Should I only be offering this property as cash terms only? Thanks in advance for the replies!