All Forum Posts by: Justin Wotring

Hey Ryan, congrats on your strong start! Looks like you're doing everything right! I'm originally from SE Michigan and grew up spending many of my days in Sylvania/Toledo before moving to California. I purchased my first duplex in Oct 2019 and 2nd duplex this past January and plan to continue investing in Toledo. Keep me posted on your journey and maybe we can work on something in the future. Best wishes! 

@Todd Goedeke yes it's a non-recourse loan

Cool stairway to upper unitLower kitchenLower living roomLower denStairs to upper - beforeStairs to upper - afterUpper kitchen - beforeUpper kitchen - afterUpper kitchen - afterUpper living - beforeUpper living - afterUpper living - afterUpper bedroom - beforeUpper bedroom - afterUpper bath - beforeUpper bath - afterBasement

Investment Info:

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

Purchase price: $64,900
Cash invested: $35,400

Another long-distance duplex investment purchased site unseen using my newly established Solo 401k that I rolled over from my previous employer. Lower unit was occupied but upper unit was vacant, so we went right to work painting, installing new floors throughout the entire unit, replacing light fixtures, cabinet hardware, and addressing general maintenance issues.

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

Continuing to add to my portfolio of multifamily, cash flowing properties for buy and hold in an area that I own another property in.

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

This was brought to me by my Property Manager but had been listed on the MLS for a while. Seller was asking $78,500, but we negotiated down to $64,900. The seller was extremely easy to work with and this was a win-win for both parties.

How did you finance this deal?

My business partner and I went 50:50 on this property. We found a non-recourse lender and created a sub-LLC made up of my Solo 401k and his LLC to fund the 35% down payment

How did you add value to the deal?

We were able to purchase the deal well below the listing price, then go straight to work remodeling the vacant upper unit. Once fully occupied, we will move the lower unit tenant from the seller's month-to-month lease to our 12 month lease, and have all utilities split between both units, creating more cash flow in the process.

Lessons learned? Challenges?

This was a great learning experience! Finding a non-recourse lender was tricky, especially because it involved bringing in a partner and having to create a sub-LLC that is made up of my Solo 401k and his LLC. This whole process was uncharted territory for us, and making sure I set things up correctly was nerve-racking and crucial to ensure no prohibited transactions occurred. In the end it all worked out and I have another tool in my toolbelt!

Hey @Tim Richter, I'm also a fan of checklists. I like to keep track of my tasks using an app called Todoist. Anytime a thought pops in my head that I want to remember later, I jot it down there. It helps keep my mind clear from trying to remember every little thing I want or need to do. In the morning I'll review my daily tasks, and before bed I'll review and plan for the next day.

I also try to meditate every night before bed using an app called Calm. They have some great programs that span across several days, each guided session lasting 10-12 minutes. I recommend 7 days of focus, 7 days of managing stress, and 7 days of calming anxiety.

You really learn how much our brains are constantly thinking and making noise; most of the time about past events that you can't change, or future events and all the possible scenarios that might happen. Meditation helps me focus on being present.

Hope this helps. If you have any questions don't hesitate to reach out!

@Travis Steinemann we'll be gathering all utility expenses during due diligence if the offer's accepted. The tenants in my other property in that area pay all utilities, so it may be similar but we'll see. Not sure on gardening either, I just threw it in to be conservative. Plugging in @Trent Stone's numbers, the properties still cash flow positive. I agree on the property taxes; however this deal still seems worth pursuing. 

Thanks @Trent Stone, will do!

Hey BP community,

An off-market opportunity to buy and hold two duplexes adjacent to one another came my way the other day and I'm heavily considering making an offer today (about 75% of value). They are very near a hospital and university and from what I gather from the deal finder, are fully rented totaling $2800/month. My only hesitations are obviously all that's going on right now with COVID-19, and I just saw that the number of unemployment claims eclipsed 3.3 million last week. I'm adding a 60-day conventional financing contingency to help ensure that we have plenty of time to do our due diligence and I have a safe cushion in reserves in case the tenants fall on hard times. I'm trying to zoom out and see the big picture of this deal instead of focusing on the immediate uncertainties. Would you do this deal now? See link to report below. Thanks!

View report

*This link comes directly from our calculators, based on information input by the member who posted.

@Phil Dodd best of luck to you. Stay healthy and safe!

@Jim K. thanks for the advice and detail of possible scenarios. I was already erring on the side of caution, but as of last night's order to shelter in place that pretty much made up my mind to halt the project. Stay healthy and safe out there!