All Forum Posts by: Jerrett Wilson

@Wayne Brooks Looks like I will be going towards my other exit strategies! Thank you for the response!

Hey BP! I got a question, that I’m having trouble finding an answer to!

A little back story before jumping into the question. In January I purchased a property that had two houses on it, a SFH and Duplex, which needed a decent amount of rehab. The numbers looked great for purchase price, ARV, rehab costs, and future rents. I used the calculator and factor in what I believed all the costs were based on due diligence. Had a contractor walk the properties to provide line item estimates. Had a realtor/broker provide the ARV, confirmed documentation with an appraiser. Had a property management company provide numbers for realistic rents and other factors. I was notified that I could separate the lots via a surveyor which would provide two separated properties for two separate refinances.

Here's the issue.. the city won't allow the properties to be separated as the SFH will no longer have access to road frontage. On paper, this is correct, but in reality there is a split driveway the leads to the back where the SFH is.

Yes, I know, I should have confirmed the surveyors plans with the city prior to purchase. In the future I will more than likely steer clear of this situation.

The SFH renovation has been completed, rented out, and I am looking to begin refinance before the duplex begins rehab as I am trying not to deplete capital reserves during this COVID19 issue. I have reached out to appraisers, lender, and REA, but due to time difference they are not available.

My question is, has anyone had any luck obtaining two separate refinances for two houses on one property? Is this even a thing?

Thanks in advance!

Jerrett

P.s. my apologies for messed up formatting, this was submitted via the app.

@Ellie Narie My personal thought, the fourplex might cash flow a little better but at what cost? You said 45 minute commute on a good day, I’m guessing for work, both ways is 1.5 hours x 5 days a week is 7.5 hours a week or 30 hours a month your losing out on. That time could be better spent elsewhere, especially if your personal hourly value is minimum 15/hr that’s $450/mo. Which might be a loss going with the fourplex.

If you’re house hacking and your mortgage or most of it is paid for by the other 2 tenants for the triplex then my personal thought is go with that and utilize your time to analyze deals, attend meetups, and acquire more properties.

Using rough numbers from a standard Zillow mortgage calculator at 4% interest this is what I see. Your numbers may be different 

Triplex:

PITI+PMI: $2,352
Incoming rent: $1,900

This isn't counting CapEx, Vacancy, Repairs & maintenance, but you're looking at a cost of $452 a month.

Fourplex:

PITI+PMI: $2,987

Incoming rent: 3,000

Once again not counting the other expenses you’re gaining $13 but losing 30 hours a month of time. 

All in all just check out all the factors considered. None of my math accounts for appreciation, loan pay down, renovation costs, etc. just simple basics. 

Good luck!

I have found contractors can be very hard to get ahold of as well! I have used google, angies list, Craigslist, and contacted located property managers. Out of 12 I reached out to, 6 responded, 3 showed up to the property, 2 offered quotes (other ghosted me), and one got the job based on positive reviews and better personality. The other that didn’t get the job was very arrogant and acted as if he was my boss. He was slightly cheaper but there were many reviews talking about his poor attitude and interacting with him proved that. 
I hope this helps. Just be persistent and don’t let contractors push you around or bully you. You’re paying them and they’re providing a service. It’s a two way partnership. Keep that in mind.

Good luck!

@Miguel Roman

Pretty much it’s all about your network. I am in the middle of purchasing a few properties with no money down of my own. Zero.

I used my networking skills and found a partner that’s putting up all of the cash and I am handling all of the business side of things. We are splitting profits 50/50. He put up the cash and I’m handling all of the business operations, phone calls, scheduling, project management, analyzing deals, etc.

That being said, I had to convince my worth and deliver on that. I may not have spent any money but I’ve spent plenty of my time getting everything done.

It’s definitely possible if you take a page out of Brandon Turner’s book and start asking “how can I” instead of accepting “I can’t.”

Good luck and wish you a ton of success!

@Mike Jacovelli

Hey Mike! I absolutely love this! My personal take on it, tell as many people as you feel comfortable with.

When I first started thinking about real estate, I told my wife. She rolled her eyes and said “okay dear.” At that point I had nothing to come back with so I decided to educate more so I could verbal judo that response with knowledge.

Next, I told my friend. He wanted in. He was hooked immediately and had been thinking about real estate himself. At this point I had listened to some podcasts and read about real estate online. I had not heard about BiggerPockets yet.

Then, I slyly mentioned it to my brother-in-law and he mentioned BiggerPockets. I began to educate nonstop. I got a Pro membership, bought and read almost every BiggerPockets book, and have listened to about 120 podcasts so far. I attended webinars and met up with another investor.

At this point, I told EVERYONE I could about my thoughts and goals. So many people have gone to verbal judo war with me about the risks, bad tenants, unforeseen property issues, etc. However, I have been well versed enough to battle back with some sort of internal rule I had created in my goals to help mitigate or manage all those issues. If I got nothing to respond with, I educate more!

Every opportunity to talk about real estate creates an internal fire inside me that reinforces my need to invest. Every conversation that brings up a negative leads me to research the validity of it and how to eliminate, mitigate, or plan for.

Since I have gained comfort to talk to everyone about it, I have had several family members, co-workers, friends, and even random people I meet want to get into it. I have gained 2 partners from it and potentially 2-3 more in the future.

All of this came from not being afraid of naysayers or negativity. If I meet a negative person I cannot seem to get through to, first I try to analyze it and find out why, then if I still cannot, then I respectfully move on to a different subject.

Anyway, I know it’s a long reply but I wish you good luck and if you ever want to talk more, let’s connect!

@James Gates congratulations! This looks awesome! I’m currently in the middle of obtaining my first rental. Multi family residence 3/2 with about the same rehab needed. so this is really relevant to me. Prices are a little different but all in all I will definitely use you as an example!

Good luck on future investments!

@Graham Northrup great job! I'm sure this will lead to many more! What was the issue with the appraisal coming in at the numbers you were hoping for? Was it based purely on comps? Or was it something else? Are there things you could have spent more money rehabbing to get those numbers while maintaining a solid ROI?

Also, what was your tenant screening process like? You stated it was a nice family, what constitutes a “nice family” and was it an emotional feeling about them or primarily a numbers thing (income, debt, job security, etc.) or a mix of both?

Thank in advance! Great job again!

@Karen F. I agree with others, get a lawyer. I personally don’t know a whole lot other than common sense. It seems as there is a lot of risk involved with this. With anything, if you’re comfortable with the risks, it will be your decision. I won’t get into what I would do, but try to step back from the emotional reasons you have listed and see if you are still willing to do it. Good luck!

@Mark F., Great job! I am looking to purchase my first property in January for my 90 day goal! What was your biggest obstacle with presenting offers and how were you able to overcome that obstacle?