All Forum Posts by: John Bradley

Great job having your KPIs and goals mapped out already! In addition to the above comments from much smarter and wealthier investors than myself I have a couple of duplexes and single families. 5 doors right now after expenses and such are making us about $2000 conservatively. There's options for us to maximize like managing ourselves instead of hiring a PM or shopping vendors for tradesman on repairs to put it in perspective. 

I'm sure you've been looking at zillow or the MLS and the 70% rule is pretty hard to come by in this market. Pretty much the only route you'd have would be finding an off market property driving for dollars or mailing to find a distressed seller. If I were starting out in this market I would look in other markets in AZ that has a large population and job growth like Casa Grande or other cities that have lower price points than phoenix and less investors that have more money and more marketing dollars than you since they'll get the good ones before you if they touch the market.

I had this conversation with my business partner about what our next steps are and we're wanting to scale into the commercial 5+ units side since there's easier manipulation of value by increasing rents and loan products that can fund the rehab as well. Using OPM needs to be a great deal not just a good deal since 1 or 2 speed bumps could put you in a really tough place. 

Have you checked out investorlift.com or loopnet.com for larger deals?

 The line in the sand on this is if the property has been permanently affixed to the ground and you own the land not lease the land.

The reason being 1. if the mobile home isn't permanently affixed to the foundation it's not considered real estate, it's considered a travel trailer/personal property like a car and 2. if they pay a lot rent, they're technically leasing the property from the owner, they dont truly own the land and have rights to transfer the land to your end buyer. 

Mobile homes can be tricky, if it's permanently affixed to the foundation you can look under the trailer and it should have straps (usually xi2 HUD straps are the go to) bolted into the foundation and wrapped around the trailer. If everything looks kosher, you'll need an engineers report to provide to the end buyer showing it follows all the guidelines for mobile homes to get financing.

If it's not affixed and/or there's lot rent, chances are it cannot be financed (at least by conforming loan guidelines, maybe a niche lender will lend on it) and it'll narrow down your buyer pool or price. 

Hope that helped!

 Hey Ryan! 
I'm in the east valley personally and have some rentals. You're currently in the Peoria area and looking to buy a property as a rental, you mentioned that you're looking for cash flow, what type of property characteristics are you looking for? Single family, multifamily, long term rentals, short term rentals, traveling nurses, etc? There's a lot of options and the reason I ask is to help pin point your goals to answer your location question :)

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $348,000
Cash invested: $30,000

Duplex opportunity in Prescott Valley AZ. Property needed renovations and the Prescott Valley market has a large medical presence. One unit is long term rental and the other is a Renovated unit for Traveling Nurses.

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

Realtor called me, the property just fell out of escrow and they knew I was from Prescott Valley and owned a duplex. We wanted to buy another property that year for us to work on.

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

Negotiations were pretty straight forward. Easy deal for the realtors and we got a couple grand off of the price.

How did you finance this deal?

Conventional mortgage. 25% down.

How did you add value to the deal?

Full renovation. Flooring, paint, counters, cabinets, fully furnished the traveling nurse side.

What was the outcome?

Steadily increasing rents based on the ever changing market in Prescott AZ.

Lessons learned? Challenges?

Property managers are aware of what their people are paying in rents, they might be too hesitant to increase rents. They work for you so you tell them what you need. We're not charging enough for the nurses so we need to increase the rents on that side of the property more.
FURNISHEDFINDER.COM is the best resource for traveling nurse housing.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

This is the only property we're using a property manager for since it's a 2 hour drive from our house.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $348,000
Cash invested: $30,000

Duplex opportunity in Prescott Valley AZ. Property needed renovations and the Prescott Valley market has a large medical presence. One unit is long term rental and the other is a Renovated unit for Traveling Nurses.

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

Realtor called me, the property just fell out of escrow and they knew I was from Prescott Valley and owned a duplex. We wanted to buy another property that year for us to work on.

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

Negotiations were pretty straight forward. Easy deal for the realtors and we got a couple grand off of the price.

How did you finance this deal?

Conventional mortgage. 25% down.

How did you add value to the deal?

Full renovation. Flooring, paint, counters, cabinets, fully furnished the traveling nurse side.

What was the outcome?

Steadily increasing rents based on the ever changing market in Prescott AZ.

Lessons learned? Challenges?

Property managers are aware of what their people are paying in rents, they might be too hesitant to increase rents. They work for you so you tell them what you need. We're not charging enough for the nurses so we need to increase the rents on that side of the property more.
FURNISHEDFINDER.COM is the best resource for traveling nurse housing.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

This is the only property we're using a property manager for since it's a 2 hour drive from our house.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Phoenix.

Purchase price: $215,000
Cash invested: $35,000

A duplex was brought to me by my handy dandy realtor from a pocket listing (not for sale yet, just about to hit the market and my realtor knew the details before it was even listed). Previous rents for (2) 3 bed 1 bath units were at $925. Bought the property, renovated 1 unit, moved tenant to vacant unit, reno'd unit 2, increased rents to $1150 (at the time), cash out refi'd and pulled 40k out (appraised for $288,000).

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

Under market rents, off market deal (pocket listing between realtors), room for rent growth and cosmetic updates.

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

My realtor called me on it! Said 'Hey I know you mentioned you're wanting to get into real estate investing so I thought of you when this came up'.

How did you finance this deal?

Conventional Mortgage. 25% down multifamily property.

How did you add value to the deal?

Renovated the interior. Very basic 2 story 3 bedroom 1 bathroom units (2 mini houses on 1 parcel of land) so the main things to update were paint, counters to granite, made the cabinets look better with wood work and paint.

What was the outcome?

Rents are now up to $1350 per month on each unit. The mortgage is $1000 a month and we're self managing the property. C grade property, cash flowing great!

Lessons learned? Challenges?

Stay on top of your tenants. Set very very clear expectations with when rent is due. Find win win solutions for the tenants and yourself. Dont screw them over, treat them like humans. Usually in C grade neighborhoods they have financial struggles which you have to be empathetic with.

Investment Info:

Single-family residence buy & hold investment in Gilbert.

Purchase price: $266,000
Cash invested: $60,000

I partnered with a friend of mine who will do the labor/remodel while I finance and support the deal financially. The agreed upon deal was that he did the labor while living in the property paying the mortgage and utilities and once completed I would refinance him off the property and pay him 50% of the equity gained over the renovation period.

Great first deal, did not expect the appreciation from COVID but definitely a great learning process!

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

The property was one of the worst conditioned in a great area. Previously owned by out of state investors with terrible tenants. Needed a whole new renovation since the property was original from the 70s and roof leaked. Seemed like a great opportunity for a value add!

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

MLS, was on the market for 30+ days. Originally posted at $275,000 but we sent the owners our home inspection and quotes from contractors showing why we needed to put a new roof and pool repairs to drop the price for us.

How did you finance this deal?

Conventional loan, this was my first primary house purchase so I pulled from my work 401k with a hardship withdrawl (no penalties but if tax deferred had to pay taxes on the withdrawl) for the down payment.
Renovations were paid for by earned income from work as a Mortgage Banker at the time. (Now mortgage broker)

How did you add value to the deal?

Full reno while the main focus was put into knocking a kitchen wall down, cabinets, granite counters, new flooring throughout, update handrails and walls that were dating the property for a more modern day look, new carpet in rooms, new vanities in bathrooms, glass & tiled shower in the master, redoing the deck outside, landscaping and the property does have a pool so we just patched pebbletec. I have a photo album of everything if you'd like to see all the photos send me a DM!

What was the outcome?

75% LTV cash out investment property refinance pulled 180k from the deal after renovations and covid house appreciation happened. Paid my partner 155k and kept the property in my name solely. Appraisal came back at $600,000 due to the increased value since the property was one of the crappier ones in a great neighborhood in Gilbert AZ called 'The Islands'.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

1. Set realistic expectations with partners and set mutual accountability
2. Document all receipts and work
3. HAVE SUB CONTRACTORS FILL OUT A W9 BEFORE STARTING WORK
4. Always run numbers conservative, if it beats your expectations even better

Investment Info:

Single-family residence buy & hold investment in Gilbert.

Purchase price: $266,000
Cash invested: $60,000

I partnered with a friend of mine who will do the labor/remodel while I finance and support the deal financially. The agreed upon deal was that he did the labor while living in the property paying the mortgage and utilities and once completed I would refinance him off the property and pay him 50% of the equity gained over the renovation period. The overall timeframe took 2.5 years start to finish and was well worth it.

Appraisal came back at $600,000 due to the increased value since the property was one of the crappier ones in a great neighborhood in Gilbert AZ called 'The Islands'.

Full reno while the main focus was put into knocking a kitchen wall down, cabinets, granite counters, new flooring throughout, update handrails and walls that were dating the property for a more modern day look, new carpet in rooms, new vanities in bathrooms, glass & tiled shower in the master, redoing the deck outside, landscaping and the property does have a pool but we just patched pebbletec since the cost of pools in the Phoenix market is absurd right now.

Ended up cashing out 180k @ 75% LTV, paying him 155k and keeping a little cash in hand while leaving my portion of equity in the house to retain it personally.

Great first deal, did not expect the appreciation from COVID but definitely a great learning process!

1. Set realistic expectations with partners and set mutual accountability
2. Document all receipts and work
3. HAVE SUB CONTRACTORS FILL OUT A W9 BEFORE STARTING WORK
4. Always run numbers conservative, if it beats your expectations even better

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

The property was one of the worst conditioned in a great area. Previously owned by out of state investors with terrible tenants. Needed a whole new renovation since the property was original from the 70s and roof leaked. Seemed like a great opportunity for a value add!

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

MLS, was on the market for 30+ days. Originally posted at $275,000 but we sent the owners our home inspection and quotes from contractors showing why we needed to put a new roof and pool repairs to drop the price for us.

How did you finance this deal?

Conventional loan, this was my first primary house purchase so I pulled from my work 401k with a hardship withdrawl (no penalties but if tax deferred had to pay taxes on the withdrawl) for the down payment.
Renovations were paid for by earned income from work as a Mortgage Banker at the time. (Now mortgage broker)

How did you add value to the deal?

New roof, landscaping, whole new renovation on the interior, redid the deck and patched the pool, fixed pool equipment, knocked out a wall in the kitchen, redid all bathrooms, carpet, flooring, etc. I have a photo album of everything if you'd like to see all the photos send me a DM!

What was the outcome?

75% LTV cash out investment property refinance pulled 180k from the deal after renovations and covid house appreciation happened. Paid my partner 155k and kept the property in my name solely.

@Andrew Daus

Thank you! So we're mid refi right now and the loyal tenants rents are only 1100, the other unit is 1350 per month.

With the original rate being 4.125 and now at 2.75 (I'm a mortgage banker so the employee discount helps) the property appraised for 288k so we're pulling 40k back out and the mortgage is only 950 PITI 🤙🤘

@Tanner Enderle

This was off of the 10 and university by the university of phoenix building/airport area 👍 one of my realtors agents on his team was selling it so he called me up for the pocket listing.