All Forum Posts by: Josh Nelson

Investment Info:

Single-family residence buy & hold investment in Okemos.

Purchase price: $350,000
Cash invested: $10,000
Sale price: $435,000

Primary residence converted to a rental after 2 years.

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

This was purchased as a primary residence.

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

Found on the MLS. Was one of 5 offers. We won the deal by going $15k above asking price and waiving inspections.

How did you finance this deal?

Conventional financing. 5% down.

How did you add value to the deal?

Converted to a rental. Compliance items such as adding smoke detectors, hand rails, fire resistant garage entry-door and new stairs outside. Only about $3k was spent to make upgrades and improvements to the property.

What was the outcome?

Operated as an executive high-end rental for 2 years and cash flowed nicely while rented. However, after tenant moved out on 9/30/24, the pool for interested tenants was shallow and so we listed the property to test the market and ended up getting an offer at asking price within a couple days. We lived in the property for 2 years and rented for 2 years to tenants, so by selling now, we ensured that we could avoid capital gains taxes.

Lessons learned? Challenges?

I learned that with an A-Class tenant expectations are higher and had to step up my level of service. Challenges related to maintenance of the property. It sat on 1.5 acres with lots of garden beds and trees. As such, just upkeep and maintenance of the yard became a factor in deciding to sell. Also, when not occupied, the PITI on a high-end home can quickly erode prior cash flows.

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

I represented myself on the sale.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $302,800
Cash invested: $40,000

Purchased as new primary residence. 5% down conventional loan. Seller paid closing costs and I received $7k back as commission. Spending around $30k to remodel and add value before moving in.

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

Great location with a value-add opportunity. Renovations of $30k for new flooring throughout and completely new kitchen. Home has a pool, so my family strongly influenced the purchase.

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

MLS listing. I offered $7k over asking and seller agreed to pay closing costs. I was the first offer and they accepted. I did not waive my commission and received $7k back with only $9k net out of pocket at closing.

How did you finance this deal?

Conventional loan, 5% down.

How did you add value to the deal?

Rehab in process. Tearing out old carpet and replacing with solid hardwood on main floor. LVP in the basement. Complete kitchen demo and remodel.

What was the outcome?

Rehab in process. Plan to live there for at least a year. Then will negotiate with family to convert to STR or MTR :)

Lessons learned? Challenges?

I'm learning to work with my handy man on time lines and project completion. I need to be clearer on expectations on that front. This deal took longer than expected to close due to seller side POA issues with the estate. They agreed to pay to extend my rate lock though so it was all good.

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

I recommend my lender, Steve Darnell at Flagstar bank and the listing agent, Christina Rademacher, of Coldwell Banker of Okemos.

Hey Anthony, Cash is the #1 source. A capital provider could be a big saver who squirreled it away for many years. #2 Source is Real Estate. A capital provider could source capital through equity in a property they own by refinancing it or selling it. The #3 source is the Market, which is any place a person can park money in hopes that it will grow. Maybe a capital provider is able to sell their bonds or stocks to fund your deal or take out a 401k loan and invest in your deal at a higher rate. For more details I recommend "Raising Private Capital" by Matt Faircloth. 

Investment Info:

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

Purchase price: $173,000
Cash invested: $30,000

Purchased via land contract off-market; 10% down, interest-only payments at 5%, balloon in 16 months. Completed cosmetic rehab for value-add. Plan to hold and rent for $2,400 - $2,600

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

I was initially interested in flipping the property.

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

Off market deal my team leader passed on to me. I first offered cash via private funds but I was told I would lose my shirt in the deal by one private money lender and the other just had really high fees so that wasn't attractive. Ultimately, renegotiated and was able to get the house on terms agreeing to seller-financing, interest only payments, 10% down, and a balloon in August 2024.

How did you finance this deal?

Savings and funds from a 401k loan.

How did you add value to the deal?

Small rehab. Replaced 90% of flooring, painted whole interior of the house, replaced light fixtures, stained deck and porch, and other repairs and upgrades.

What was the outcome?

I ended up moving into the home after fixing it up. In doing so, I was able to transition my prior primary residence of 2 years into an executive rental. More to come, in the process of finishing upgrades before moving to a new home (future live-in rehab).

Lessons learned? Challenges?

Takeaways include the contacts I made in the process. Networking is key to future success.

Challenges: this deal took six months to close because seller couldn't make it to a US embassy to sign documents. I ended up becoming a renter of the home before we closed. Seller was furious with the title company and kept faulting them for delays.