All Forum Posts by: John Armando

@Joe Impagliazzo 

What about if this was a rehab and the refi loan would account for the new ARV?

@Joe Villeneuve @Molly Armando

Joe thanks for the thorough follow-up. I've been looking into the BRRRR method, but was uncertain as to applying the strategy without an all cash purchase. For example, I've found a property that is distressed, and has an estimated ARV of 270K (3 family). My GC and I estimate about 100K in rehab costs, thus would require a purchase price of ~90K to meet the 70% rule. I can obtain a rehab loan for $200K with a 20% downpayment from my local portfolio lender. At this price and rehab, I would cashflow ~$674 per month (including property management (10%), long term maitnanencae (10%), Vacancy (8%) etc. etc.) giving me a 20% CoC and 14% ROE.

If this deal goes through, once I rehab, where do I go? Am I able to Refi and cash out even though I'm not all in cash? Where would I look for this refi?

@Daniel Frigo

Hi Dan, Welcome to BP! I'm a local MA member as well and still looking to close on my first deal. I'm focused in the SouthCoast, MA area looking to build a portfolio of multi-family units over the next 10-15 years for the passive income.

Best of luck on your journey and you will certainly find the best resources here at BP. 

@Robert Andrade

I think this may be a more relevant resource (https://www.flickr.com/photos/massdot/sets/72157651250525442/) which shows activity as recently as this past December. so I'd argue that there is some activity. 

There is some activity in NB for revitalization. Although slow, it is happening (http://www.southcoasttoday.com/article/20160308/NEWS/160309520). There are a great number of issues in the city, particularly the heroin use and gang related violence, but as a landlord that is your job to locate safer areas and effectively screen tenants. I think there are opportunities but the onus is on you as an investor to identify a successful property and understand the area. 

@Timothy Meuse There are also options to work with a local (non-national) bank portfolio lender that may allow a 5% down-payment option, that is non-FHA. I've heard of opportunities for these types of mortgage options that may only require a 6 month owner-occupancy period compared to the 1 year OO required under FHA. Alternatively, you can get creative and work with hard-money or private lenders to buy the property, rehab, and cash-out after building the forced equity by refinancing.

@Zachary Patten Welcome Zach! I'm a newbie investor as well, and have been working to build up my knowledge base before jumping into REI. My fiancee (@Molly Armando) and I are looking for longterm wealth building through passive income with multi-family and SFRs while leveraging single family flips for capital generation. 

I've found the books "Rich Dad Poor Dad" by Robert Kiyosaki (a standby you'll hear from about everyone), J.Scott's book mentioned above, and "What every real estate investor needs to know about Cash flow..." By Robert Galinelli. The last book I found incredibly helpful, espcially as I'm an engineer by training and a numbers guy. Buy the book, sit down for a weekend and build a kick *** analysis spreadsheet. It will make your life easier when analyzing deals to plug in a few quick metrics to rapidly ID good deals. 

Our next step is finding the best ways to locate deals beyond the MLS...I'd be glad to gain any insight from the experienced members on BP.

@Robert Andrade Hi Robert, yes we are contemplating both non-owner occupied financing, which would likely require a 25-30% downpayment with investor based financing, or alternatively an FHA route with a 3.5-5% downpayment + PMI. This of course would change our numbers quite a bit, but under both scenarios looks to cash flow. This would be our first deal, as we are looking to enter the real estate market with an easier to maintain/manage multi-family while we live in the city for work. Once we are ready to make the switch, we plan to find properties that may require a bit more oversight for rehab + rent or rehab + flip.

@Paul Timmins Thanks for the advice. I think most of my cost models I have expenses at about 45%-55% - which includes 10% property management fee, and 10% long term maintenance fund. I'm definitely interested in looking at HUD homes or REOs, but still learning the best routes for finding those deals, any other tips?

@Tim Wilkinson Thanks Tim. This unit is deleaded and in fairly good shape, beyond some external cosmetics, but We still need to do more due diligence on the property with a more thorough inspection. As mentioned above, we are looking at more turn-key like multis to enter REI while we live about 1.5 hours away, once we move closer we hope to look at more rehab projects.

Hello All,

I've been looking to identify a multi-family unit in the SouthCoast of Massachusetts and found a few options that I think could cashflow. I wanted some guidance from more experienced investors to see if I may be forgetting something with this current potential deal.

Units: 3 x 3 bed 

Price: $255,000

DownPayment: 5% 

Renovations: $2500 

Interest: 3.5% + 0.8% PMI - estimated I have very good credit so from previous pre-approvals can expect this rate

Points: 1.5% - estimated

Rents: 3 units - $950, $900, $850 - estimated based on area

Taxes: $3174

Utilities: estimated at $225 per month - likely on the high end here

Insurance: $2000 per year - estimated

Maintenance: $50 per month - estimated

Vacancy: 7.5%

Long term maintenance: 10% for large capital expense - roof, water heater, etc.

Property Management: 10% - I don't intend to use property management but for future potential I'd like to budget it in

With this I expect to cashflow $1966 before taxes, $1415 after taxes, for a 10% CoC and 7% ROE.

I'm just starting to get interested in similar investments @Jimmy Murray. I live just outside of Boston and am looking to invest in a short term rental property in the North Conway area. 

I've identified some potential properties, but am trying to get a good feel on how to value the property, how to assess rental income, and find the best way to interface with VRBO, Airbnb, and a property management team that would be able to deal with key drop-off etc. 

Just interested in hearing your thoughts.