All Forum Posts by: Karl Denton

Hello @Chi Sastry,  
                           

My fulltime career is actually working in the Town of Windam and the City of Willimantic. Its a great place to invest if done properly. The community has a good amount of section 8, and other renters to choose from. Location is key so unknown to which property your looking at I cant speak of that one. Theres a large college called "Eastern Connecticut State University" which allows you to host college kids in the units and increase your ROI! If you want to know more or have any questions feel free to message me. Plenty of investors do very well and others fall into the hole of slum lording and unfortunately have issues and violations in there homes.

If it was clearly stated in the lease, you should absolutely charge back the tenant. Make sure going forward you update your lease and outline the responsibilities of the tenant so there's no surprises. Doing this makes for better tenants moving forward. 

I personally use David Blackwell out of Manchester for my closings and real estate deals. He is fairly priced and always good about answering questions I may have about a upcoming deal. 

The bigger question is will you be living there too? You can look to buy a duplex, triplex, or a four-plex using your VA loan. However, the property purchased cannot be used solely for investment or rental purposes, and one unit must be your primary residence. As far as refinancing, to my knowledge you can absolutely refinance your VA loan to a conventional loan so that you can use the property for rental. As long as you follow the rules within this loan you should be in good shape.

First question for this, is this an off market deal? I'm guessing based on your details its not, if its worth it then get a hard money lender to do a BRRRR. However 100k can get blown over budget fast, roof and septic are larger items. You have to shop for the right people. I have a roof connection but not a septic on in that are. Networking at meetups is also a great way to get help for these deals. Message me if you have any further questions.

Has there ever been an embarrassing moment behind the scenes for the speaker on the show or anyone else?

Investment Info:

Large multi-family (5+ units) private money loan investment.

Purchase price: $262,000
Cash invested: $50,000

Syndication deal with 50k invested, 12% APY return. 6 Month project, rehab 105k, ARV ~ 540k
Did this deal with a local investor I met at a networking meetup, I'm going to be hands on with this project and learn how they are doing this deal all the way up to Commercial refinancing with this deal.

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

Wanted to learn how syndications worked in the paperwork side of things. Also wanted to learn more about the BRRR method and commercial lending.

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

Networking through local meetups I linked up with another investor.

How did you finance this deal?

I had cash from my current property and from a refinance before rates went up.

How did you add value to the deal?

I am familiar with how these deals work and can help give my opinion on the construction rehab portion.

What was the outcome?

its a 6 month project and at the end ill have more knowledge, capital, and a lump sum payout.

Lessons learned? Challenges?

So far learned there's a lot of paperwork into a deal like this to lessen the amount of risk. Luckily working with my real estate lawyer has been great.

Quote from @David S.:

Quote from @Karl Denton:

Bulletproof kitchen reno that I was told and has worked for me is, Granite countertops and subway tile backsplash. Go with a Luxury vinyl plank floor as well, they hold up well and clean easily for both you and the tenant. I also created a master key for my rental so that I don't have a million keys for the place. Streamlining is the goal with all the units. 

Can you elaborate in the master key idea please? I’m not understanding how you’d do that and still have a unique key for each tenant. 

When I first started looking I thought the same thing, how can I have a master key but have everyone else have different keys for separate apartments. I then stumbled across a kwikset Deadbolt option that offered two different keys however it wasn’t the same keyhole. (Don’t go this route, not worth it) I then decided to talk to my local locksmith and they are able to give me high-quality Schlage locks and they can key a master key and they can also key individual tenant keys. In this building I also had tenants that had three different keys because they had deadbolts, regular knob locks and another door that also had a different deadbolt. The tenants were so happy that I installed brand new locks and they all had one key to their apartment and I also had one key as the master key, the great thing about the master system was that I also could give my maintenance crew a key so that they can access the areas that they need to without accessing the individual apartments like the basement and any other storage units that were locked.  The best part about my local locksmith is that he keeps everything on file of my apartment building so that I know what keys have been made and as tenants leave if I’d like I can get the keys remade and not use the same past keys, it’s a great way to track all my keys. Feel free to message me if you have any more questions.

A series LLC is going to give you all the same things as a regular LLC however its more of a "umbrella company" with more protections for multiple companies or lines of business you may be involved in. It can help to separate your assets from liability, with less expense and more flexibility than other structures that mitigate liability risk like the holding company or parent-subsidiary structures.

There is a con to a series LLC, one big fact is its a relatively new and unused type of entity. It is subject to very limited case law so it is difficult to determine if it will hold up in court in a foreign state that does not have any statute that permits or recognizes the creation of a series LLC. These new laws are still developing creates risk for businesses due to the unknown. As time goes on we will see more cases and be able to make a better judgement call on weather its worth it or not. More so as a "Buyer beware" at the moment. 

Quote from @Matthew Gu:

That's very helpful, thanks @Karl Denton!

 Hope it all worked out!