All Forum Posts by: Kerry Mertz

Are you still looking? I'd love to be a part of this!

Single-family residence buy & hold investment.

Purchase price: $90,000
Cash invested: $46,000

3 bed, 1 bath single family rental
Strategy: BRRRR
Purchase: $90,000
Renovation: $46,000
ARV: $205,000
Rent: $1850/month

Refinanced at 75% ARV to pull out the initial investment and then some.

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

The numbers looked good from the beginning and also left room for error.

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

Off market from a wholesaler.

How did you finance this deal?

Hard money loan with 15% down and most of the rehab costs were included in the loan. We used a HELOC to make up for expenses that exceeded the loan. Did a cash out refinance into a conventional 30 year mortgage after the 6 month seasoning period.

How did you add value to the deal?

Complete renovation- kitchen, bathroom, flooring, landscaping, paint throughout, plumbing and electrical.

What was the outcome?

The finished product looks great and it appraised for more than expected!

Lessons learned? Challenges?

I never knew how many renters have terrible credit. Out of the 50-75 people who inquired about the rental, less than 5 had a credit score above 600. The tenant I chose had a credit score around 575, but he had sufficient income and my gut instinct about him was good. He has been late every month with payments but does pay. I don't regret choosing him so far.

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

Ask me for references, if interested.

You’ve come to the right place! Welcome!

You can have excuses or you can have results, but you can't have both. 

I forgot who said that but it's true. Don't listen to your friend.

If you can find a deal under market value where you can add value, it's always a good time to buy. 

Think: off market, wholesalers, realtors who work with investors.

I've seen most of the multifamily inventory in Meriden lately because I have an investor client looking there as well. My experience has been that anything in the $100-150k range is either in a less desirable area or has a lot of deferred maintenance. Most multifamilies in Meriden are about 100 years old, which isn't necessarily a bad thing if they are well taken care of, but many are not. 

My suggestion would be to nail down your strategy first- buy and hold, BRRRR, house hack, ect and make sure your partner is on board with your strategy and goals as well. If you have a large amount of capital to invest, it may be worth it to increase your budget to include properties that may be in better shape or better location.

Either way, don't rush into something just because you're eager to get started. Get the fundamentals in place first then move forward with a purchase when you are sure that it fits your strategy and goal, even if you have to wait a while.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $90,000

Cash invested: $17,000

3 bed, 1 bath single family rental
Strategy: BRRRR
Purchase: $90,000
Renovation: $37,000
ARV: $180,000
Target Rent: $1800-2000/month

Will refinance at 75% ARV to pull most or all of the initial investment back out.

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

Numbers look great!

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

Off market from wholesaler.

How did you finance this deal?

HML with 15% down and 100% reno costs borrowed.

How did you add value to the deal?

Complete reno with kitchen, bath, laundry room, open up the floorplan, new flooring and paint.

Say what you want about Bridgeport, but it's a hot market for flips and the rental rates are high relative to purchase price. The rents are high enough to make up for the higher taxes. There are lots of renters in Bridgeport and lots of buyers looking for renovated properties. The only challenge in Bridgeport is getting a property under contract because they go so quickly, and often with multiple offers.

Sounds like maybe you don't want to work with your buyer's agent anymore or else you wouldn't be asking. Why not have a conversation with the buyer's agent to see if they will terminate the agreement? Because I believe the answer to both questions is yes, the buyer's agent is entitled to the commission and could fight for it if they have an agreement signed. (If they decide to fight for it.) However, if you decide to part amicably, then it shouldn't be an issue.

If you do still want to work with the buyer's agent, then I agree that you're better off working with them even though the listing agent showed you the property. Remember the listing agent is representing the seller and the buyer's agent will be looking out for your best interests.

I think we need more information. You said it is slightly distressed. How much does it need in repairs? 40% in expenses might be correct or it could be way off. Can you find out more information about the expenses from the seller? What is the location? What is the vacancy rate in that area? Are you budgeting for vacancy and maintenance? Will you be using a property manager or self managing? What is the market rate for rents? $6000/month for 13 units averages to $461 per unit per month. Is there room for an increase? These are all important factors to consider to be able to determine whether it's a good deal or not and how much to offer.