All Forum Posts by: Jeff Plotkin

Closing on a BRRRR deal in two weeks and I was wondering if I will need insurance during the rehab phase of the deal. Is it ok to wait until I refinance?

Thank you @Theresa Harris and @Aaron Hollingshead!

This makes sense to me. Unless I can get a steep discount on the purchase or if I think I can rent it for more than the current rent, I won't pursue. The block is filled with identical multifamily properties and it looks like the other units are renting for over $700 per door, so I'll need to investigate this possibility. 

My agent just sent me a 4-unit property that rents for $600/door. My conservative estimate is that it will cash flow around $300/mo total. My other property in the area (SFH) cash flows $200 and the purchase price was half as much.

Is it worth investing in a multifamily that does not cash flow that much better than a single family home? I am not sure if the extra work associated with a multi-family makes it worth it.

If you are buying a property with a partner, is it common to form an LLC with that person? Is it possible to have your LLC and the partners name on the title, separately? How does buying a property with a partner typically work in regard to the title and ownership?

Thanks Kyle! Should have mentioned that cash flow already accounts for Repairs and Maintenance at 7% of monthly rental income

At the beginning of this year, I decided to just take the first step by getting pre-approved with a lender. I shopped around with 3 different lenders and after getting approved, I reached out to my aunt who is an agent in NY. She connected me with agents in North Florida who set me up with daily MLS emails after a discussion on my goals/pricing.

After monitoring these emails daily, we finally found a home that would work. The sellers stayed firm at $130k when I wouldn't move higher than $125k. There was no deal, but 3 weeks later they came back and agreed. They even threw in a 1 year seller-paid warranty and a $1,500 concession to reduce my closing costs!

We closed before the end of March, even while we were all on COVID lockdown. I could not travel to the house at all and after sitting vacant for 1 month, I had property managers get it rented for slightly above market value for a May 1 move-in.

After budgeting for all expenses, including capex, property management and vacancies, I will be profiting just over $200/mo in cash flow!

BiggerPockets has been an enormous help through this process and I only plan to be more active on here as I work to grow my portfolio and find partners.

I was able to place a tenant that moved in on May 1. They even rented at above market value according to the comps. 

 It was in the inspection report. The insurance company did not think it was a problem and approved me, then later changed their mind. I don't know much about this but the inspector suggested changing the connectors to alumnicon connectors, while my property manager's electrician suggests replacing the panel. Not sure what really needs to be done.

There is an issue with my home because it is wired with aluminum wiring. Most insurance companies would not take on my house, however I found one that did. Now 1 month after closing, they want it repaired. My broker recommended I change to this other provider for around the same price, and my quote to make the repair is $3,000.

Should I just change insurance and hope they don't request this repair, or just make the repair?

Thank you for sharing this! I really appreciate the detail that you provided and I find what you've done inspiring. I live in NYC and I am investing out of state as well (closing on my first deal in FL next week).

I have a couple of questions for you:

1. On your 3rd property, you purchased using hard money and will not be doing a rehab. When you refinance and get back 75% of appraised value and pay the interest on the loan, how will you be coming out on top? It seems like that is a costly way to finance when the appraised value will not be that much more than your purchase price.

2. Do you have any tips for managing a rehab from out of state for investors that do not have a construction background like yourself? What do you feel are the best and easiest ways to increase the value of the properties you buy?

Thank you!