All Forum Posts by: John Doehler

Investment Info:

Single-family residence buy & hold investment in Pacolet.

Purchase price: $97,001
Cash invested: $172,000

There are two houses (1948 sqft & 1596 sqft), an office (360 sqft), and a shed (192 sqft) on this large property. We split the property into two residences. We plan to add several tiny homes and/or RV Airbnb spots. This project will be in progress for a while...

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

Low purchase price for the amount of land, the state of repair of the largest and smallest houses and the ability to get started on our real estate investing journey.

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

Found it on Zillow; it was bank-owned. It was listed for $99,000 when I first saw it, but the price dropped to $79,000 two days later so I told my wife I had to drive out to see it (36 miles from my house). I put in an offer and a couple days later was told to put in our "highest and best" offer. Using a little psychology, I decided to offer $97,001 (added a dollar, just in case someone else thought to offer the same price) and came out the winner.

How did you finance this deal?

Cash. Financing wasn't an option

How did you add value to the deal?

I did a lot of the gutting work. I ripped-out carpet, walls, etc. and hired a contractor to rehab it. We put in a new water heater, complete HVAC system, including ducts, lights, shower/tubs, flooring, etc. It was like a brand-new house when it was complete.

What was the outcome?

We were all in on that property for $172,000 and it appraised for $260,000. We BRRRR'd it and are using the extra money to BRRRR the other house on the (split) property. We had to put more into this house, but it should also generate an extra $80-100k.

Lessons learned? Challenges?

Don't do anything you don't feel comfortable doing. I fell off a ladder while painting the sides of the 2nd floor deck. The surgery was just under $50k, but my portion was $1,400. I could have paid less than my portion to paint the deck. Also, I'm technically retired (from the military) so I should be relaxing a little more.

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

We used the same RE agent to buy our first investment property that we used to purchase our house four months earlier. We used a local contractor who knows just about EVERYONE in the county. He knew a tree guy that removed five trees for $1,250. We had a 340-foot long (by 10 feet wide) concrete driveway poured for $21,000 (including grading, rock base ,etc.). You name it, our contractor knows someone... He's currently finishing-up the house on our second property.

Investment Info:

Other buy & hold investment.

Purchase price: $50,000
Cash invested: $60,000

Still waiting on the structural engineer's assessment, so I can get the general contractor to give us an estimate for doing the work, so I can get financing. It takes time, but this is a great location and a really awesome property. I met another investor there that's putting in a micro-brewery/restaurant with a music venue behind the restaurant. His business is less than 2 blocks from our building. Luckily, our time-lines for completion are similar.

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

Cash-flow, long-term wealth creation, excitement in making money rehabbing an historical building. Our building is #20 on the Historical tour of Williamston, NC.

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

Luck. I found it on the Internet, but I'm not sure if it was Zillow, LoopNet or Crexi. It was a cash deal and I paid asking price.

How did you finance this deal?

Cash. We also paid to fix the roof/roof structure and gutting the building. All-in is about $110,000 (cash).

How did you add value to the deal?

We're still working it, but we gutted the building and will build three offices, two apartments and one storage/laundry area on the first floor. The second and third floors will each have four apartments.

What was the outcome?

Still working on it...

Lessons learned? Challenges?

One challenge is the time it is taking for getting everything needed to move forward (structural engineer, general contractor design, financing, etc.). Since its a small town the permitting process has been relatively easy.

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

"So far, we're working with a general contractor, a commercial roofer, the county inspector and a commercial mortgage broker.

Is it in a location that could support short-term rentals (STR)? You could start by furnishing one unit and see how it goes. You'll may need to have a kitchenette to make it more desirable.

Could you setup/clear-out a picnic/grill area next to the creek as an outdoor living area for guests? 

My wife and I live in Upstate SC and currently have two SFH's on long-term rentals, and we own a former bank building in eastern NC that we're turning into 10 STR's (boutique hotel). If your place is unique you may want to do short-term rentals. The revenue can be a lot better, but it would be more work. Good luck!

@Stephen Jones instead of selling (using the 1031 exchange) could you keep both 8-units and just get a loan based on the value?

@Phyo Ko there's a lot of good advice here, but since none of us know all the nitty gritty details the final decision is yours. If it were me, I'd take Drew Grossman up on the one-on-one he offered. Also. If you decide to rent by the room or do short or medium-term rental, besides using 0% credit card, you could look into rent-to-own furniture (they'll deliver). Don't give up hope. You've got this!

@Bhaskar Nyshadham I'm also neither an attorney nor an accountant, but as the sole owner of the C corp you may have no protection from lawsuits. Check with an attorney prior to investing too much time/money.