All Forum Posts by: John Webber

Hi Rumi, I invest and live in KC metro area. Currently rehabbing single families with goals to move into commercial properties. If you ever want to chat real estate, feel free to PM me. 

Enjoy your trip back to Seattle. Looking forward to hearing your progress on your 8-plex. Curious who you go with for PM

Nice looking multifamily properties. What are the rents? What location in KCMO are they located?  Good luck!

Thanks David! Stayed tuned! Definitely will be posting before and after photos once we are completed on the rehab. Will be updating as the story unfolds

Investment Info:

Single-family residence buy & hold investment in Kansas City.

Purchase price: $100,000
Cash invested: $135,000

We have been making multiple offers on the MLS for the past four months. Finally found this wholesale deal through a friend- proving that relationships truly matter in this business. Already looking forward to the lessons we learn on our first one. Please let me know if you have any questions. I am excited to help others break into buying their first BRRRR property.

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

The value add was our primary interest. We are able to build a business relationship with contractors that will pay off in the future. We also enjoy being a part of the rehab to customize the interior layout. Financially it makes sense for us because we enjoy forced appreciation and the rehab reduces our repair and cap ex expenses in the near future because all systems are new.

Deal Breakdown:

* $1400 for rent
* $256 monthly cash flow
* 34.94% cash on cash return

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

We found the deal through a rehab friend that was originally planning on flipping the property. We made a straightforward discussion on price. Being that they were going to rehab the property anyways we did not use any hard tactics here but found that the rehab was where the value would be realized.

How did you finance this deal?

Cash initially. Then plan to use a portfolio loan for refinancing after the seasoning period. We are looking at leaving $8.8K in the deal based on 80% LTV loan. We estimate a $161K ARV.

How did you add value to the deal?

Convert the property which was originally a 2/1 single-family property to a 3/2 single family (complete interior demo, remove the garage, new HVAC system, framing new rooms, new electrical wiring, new plumbing, new flooring/walls, new siding and paint, new roofing, landscaping).

Lessons learned? Challenges?

Always look to add value to a deal where it makes sense. Find out who the pros are in the area and learn from them.
Talk with multiple lenders, insurance brokers, property managers when structuring the deal. Do your research and ask for help when you need it. We still have yet to learn all the lessons on this one!

@Adam Rudolph. I have a few lenders I've worked with that Ic ould recommend to you. Send me a PM and I can send you a list of those portfolio lenders. 

@Michael Bacile as I understand you can use Homeready to purchase rental property. The Fannie Mae website says borrowers do not need to occupy the property. Keep in mind there is an income restriction depending on the area.  https://www.fanniemae.com/content/fact_sheet/homeready-overview.pdf

@Chris Mason lol was just looking at the options and saw it listed for FHA, but not these other Fannie/Freddy loans. I have yet been offered this as an option before when engaged in "human interaction" with a loan officer ;)

@Ryan Harsche thanks for all the help! 

@Ryan Harsche thanks! So the interest rate is determined by the income?

Hey, I'm doing research on the Fannie/ Freddy loans for a possible move-in flip or hold. I'm struggling to find any information on what the mortgage rates look like. Maybe they are the same as the FHA mortgage rates? I'm aware of the income limits base on geographic area and curious if this would include a couples' dual income if they will both be on the loan.