All Forum Posts by: Khalil Sleiman

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $254,000
Cash invested: $16,000
Sale price: $370,000

Purchased initially as a primary residence, moved out less than a year later, found a great property manager and started renting it out. Cash flow was about $200/month with little maintenance cost and interaction.

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

I was moving to a new city for a new job, but did not want to sell the property I bought less than a year before. I looked into renting it out and the number made sense.

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

I used an experienced realtor who showed me a bunch of houses in the area.

How did you finance this deal?

Conventional Loan

How did you add value to the deal?

I installed a skylight, bought a washer/dryer combo unit, and installed a reverse osmosis system.

What was the outcome?

I successfully rented it out for 3 years before selling it for a profit.

Lessons learned? Challenges?

Lessons Learned:

1. Real estate is a great way to build wealth, but it takes time.
2. A great property manager is invaluable. 
3. Not all tenants are created equal, so be patient and find the right ones so that your property is taken care of.

Challenges:

1. I wanted to sell to free up capital and time the market, but the tenant's lease hadn't ended yet. I tried to incentivize them to move out early by offering to cover the last months rent, but this was not enough for them to act quickly enough. They still moved out early but it took a few months. 
2. Tenant did not take good care of the property. Had to spend over $6,000 on repairs after they moved out for ripped carpet, holes in the walls, broken microwave handle, baseboard repair, plumbing, painting, and other misc. work. 

@Bruce Woodruff, thank you for the input! I am still looking for other options. Not 100% convinced just yet. 

@Dorothy Butala, thank you for the thoughtful reply and advice. You are right that I do not have a trusted crew in Baltimore. I am new to the area and I am looking to build a team. I understand your words of caution around taking on a large rehab without a trusted team. I probably sold myself a bit short with my justifications for taking on this project. Some other reasons include, the inventory in the market right now and my desire to make connections and build a team in the area so that I can grow my real estate portfolio. Although I would live in this house, I would be looking to use my experience and connections to invest in another project after.

I am not completely without experience, although this would be the largest project that I have taken on so far. I have completed renovations in a different market including kitchen, bathrooms, lawn, and flooring, although none required pulling permits and a lot of the work was done myself. My expertise is in Project Management and I have 5 years experience with projects in the power transmission and distribution industry, mostly working on high voltage converter stations. I have a lot of related skills and experience, which I believe give me a leg up taking on this project. I do expect to learn a lot of lessons, but I have decided that this is what I am going to do and I am hopeful that this community will help guide me. 

To stick with your analogy, I feel like I have already crawled enough, jogged a few miles, and now I want to run the marathon. Maybe it is a big goal, but I'd rather aim high. I would like to partner with someone that has experience with renovations in the area, but I am not sure I have much to offer them in this deal since I will be living in it after the renovation. 

I'd like to hear your thoughts. 

Thank you for your time,

Khalil

Location and getting in with equity. 

Hi everyone,

I recently moved to Baltimore and am considering buying a property that would need significant work. Basically a full gut, including an addition and adding a full bath. Currently a 3/1.5, 1130 sqft; aiming to turn it into 3/2.5, ~2000 sqft. I am looking to gain some recommendations for a GC that could help estimate the rehab cost and do the work. 

Thank you in advance for your help,

Khalil

@Luis Fernando Botero, I am curious what you ended up deciding to do? Did you find and interior designer or did you do it another way?

Thank you!

@David Avery, thanks for the reply and advice. I am looking to move out of state and start investing in a different market (Baltimore). The Phoenix market is really hot right now and it is really a sellers market. Do you think the sort of appreciation you are referring to will last for another year or maybe we will see a correction this year? 

@Account Closed thanks for the reply. Interest rate on that loan is 4.125%. If I were to refi, it could increase my cash flow by about $160/mo at a cost of about $5500, which is a breakeven period of about 34 months. New rate of 3.25% (current rate is original and obtained as primary residence when rates were higher, refi would turn into investment property). New loan amount would be about $232k. 

As for new investment property type, I am looking to switch markets and I am thinking Baltimore as I plan to move there this year. I am currently learning that market and trying to develop relationships with local partners. As I am trying to figure out a new primary residence for myself, I am leaning towards keeping that property as is or switching to STR until I have relocated and learned the new market. I plan on reading that book soon though.

I don't think a cash out refi would get me enough cash for the purchase and rehab of the new home and I might be better off keeping the numbers on this property as is while obtaining funds another way. If I were to do a 1031 improvement exchange I would have to buy a property with an ARV at or above the sale price of this property.

Hi everyone,

I plan to move to Baltimore this year and I am looking to build quality relationships with great agents, contractors, lenders, and property managers. If you are one and have experience working with investors or if you are an investor and can make some recommendations, please reach out to me!

Thanks, I am looking forward to hearing from you!

Khalil

Hi all, 

I am looking to really kick up my real estate investing this year and have decided to use the BRRRR method to build a portfolio properties that can provide me with the financial freedom I desire. I have few options to get started, but I am trying to figure out if I should leverage an existing rental property to get the capital to start. Here is some info on the property:

Property details:

Location - North Central Phoenix

Estimated Value - $340k

Mtg Principle - $225k

Looking forward to hearing your thoughts!

Thank you!