All Forum Posts by: Kyle Eckert

Quote from @Tristan D Yang:

Hello Biggerpockets community,

Excuse me if I don't form this post correctly as I am a newbie! 

Back story, 20 years old living with parents in Southern California. I plan on driving in to Saint Louis with intentions of acquiring, rehabbing and renting out Multifamily property. Pretty much BRRR strategy but I personally will do most of the work and be on the site at all times. I plan on staying anywhere between 1 to 3 months till the project is finished. I also have family in Western Illinois, so this gives me an opportunity to stay in the area and commute back and forth as needed and eventually just stay in the investment till it is finished. I have been working since middle school, have always been very frugal with my money and been independently investing in the stock market since I was 16. This has led me to build enough capital to get started in real estate, around 100k for the sake of this post. Also, my family is a blessing to me and hasn't made me pay rent ever which is a big cash saver for people my age.

The purpose of my trip is to acquire a multifamily (duplex, triplex, or quadplex) with the intention of adding lots of sweat equity and value, Interior and Exterior. I am not planning on flipping, I plan to BRRR this as my first multifamily investment. I will take any advice and help from Ya'll including proper zip codes/locations, best property management companies in the area, wholesalers and brokers that specialize in multifamily properties, and anyone willing to input advice.

Thanks in advance. 

Tristan Yang

Tristan,

I think your plan sounds very doable, although BRRR ing multifamily properties can be tricky since the numbers add up so quickly when you multiply everything by 2-4.
As Michael said, North City is not for beginners. STL desperately needs investors willing to enter those areas, but new investors shouldn't iny opinion.

Personally, I like Tower Grove East, Benton Park West, and Fox Park for BRRR projects. The combination of busted buildings and new projects makes it so you can find your ARV comps to make the project work.

I tried a BRRR project in 2019 and it was really close to a disaster. Reach out to connect and I can share my experience. 

Cheers

@Lesley Martin some STL county municipalities are using their inspections to spruce up the neighborhood, targeting investors.  University City is really big on it right now, as well as a couple of other North County townships.

I would see what function is the driveway going to provide?  Does it need to go to the backyard?  Is the goal to get a car behind the fence, or is the length of it a relic of previous usage?

Maybe you can demo half of it and pour a concrete pad for the useful part?  Then, while you have a concrete team out there, check the front steps and sidewalk for areas that need attention.  Getting the truck and guys out there is half the cost of concrete, so I always try to get my money's worth when they come out. 

Last note, some towns have a sidewalk maintenance program, where they will share the cost of sidewalk replacement, or cover it.  Depends on the town, but its worth looking into.  The driveway will include some sidewalk, so it could mitigate some costs. 

STL city has a 50% cost coverage on sidewalk replacement, for reference.

@Jared Hennings I think your deal is missing some info.  I suggest plugging in your numbers to the BP calculator to make sure youre not missing anything.

@Lewis Fisk

@Matt Alvino nailed it pretty well with the description. I'd like to add Benton Park, Benton Park West, Tower Grove East, and Tower Grove South into the middle ground for investing. Much less block to block than Dutchtown, but they still can have a vacant building and a new build on the same street. That combination of high ARV rehabs with crappy buildings nearby are neighborhoods I am bullish on right now, as that is the catalyst needed for an overall improvement in the neighborhood.

I'd love to connect, feel free to reach out for a more in-depth conversation.

Quote from @Adam Lacey:

Hello, I'm looking for property management recommendations for a 48-unit in St. Louis. Any help would be greatly appreciated.

Thanks!

Adam

 I can recommend a couple PM companies, as well as our own. I'll connect and send the details.  Pretty sure I'll get flagged for hocking services on here.

I suggest you find a company that aligns with your goals. Make sure you understand the screening, leasing, maintenance, etc. offered by the company, so nothing is a surprise or falls through the gaps.

@Michael Fitzgibbon

When ballparking a building for a gut rehab, we use $100/sqft to eyeball it, so 85k for your rehab may be a bit light, but not by too much.

Then, if the numbers still work we go through and line by line the repairs needed.  Bringing in plumbers is usually the biggest cost, followed by HVAC if ductwork is needed.

@Ian Barger

I have a lot of buyers looking to house-hack as well, seems to be a popular option with rent increasing across the board in STL. I closed on 2 deals last year with FHA, and you are at a significant disadvantage using it, and Im not being shy about telling my buyers that. The secondary appraisal for the FHA loan can generate significant work before close, especially for multifamilies which have been slightly neglected for years. (read, most of the multis in STL) We even had higher offers passed over for conventional or cash offers.

That said, there are a few programs out there for first time home buyers that I am pointing people at:

A local STL credit union has a first time buyers program that works for up to 4 units. 0% down and covered closing costs in exchange for a slightly higher APR for the length of the loan. This is my first stop for house hackers.

One of my lending partners has a 5% down conventional product, but it has a home ownership course you have to attend to qualify.  Still, 5% down is better than 15%.

Finally, you could shop around for a Hard Money Partner to help buy it in cash.  This is not ideal, but would give you the cash advantage.  Then quickly refinance out of the hard money using a deferred finance option.  The goal would be to find a hard money guy who doesn't do points, just rate/term.  Rare, but they do exist.  This is by far the worst/most expensive/most complicated option, but you are looking for options, right?

I don't want to get flagged for promotion, so feel free to reach out and I can connect you with the programs.

@Sana Tan

In the county, occupancy rules will be determined by the municipality you're in.  Some are much more lax than others, some are super strict on the side of absurd. Unversity City is the pinnacle of this, they are on a mission to improve their city through occupancy inspections.  Brace yourself if you're in U City.

As for STL City, I ask for a checklist from each inspector I work with, and they all have said the same thing. "Thats a great idea, but we don't have one."  The city occupancy inspection is highly dependent on the inspector.  Some don't even show up and pass a property, some will make you rip out the walls if you did electrical work without a permit.

Things I have been dinged for:

Handrails, smoke detectors, CO detectors, and holes in the wall (service stairwell).  Each time I fixed the issue, took a picture and emailed it over for the permit to be issued.

Be friendly and punctual, ask questions and chat them up to show you're engaged, and don't be a slum lord.  Follow those basic rules and you should be ahead of the curve.

@Brian Taylor

I exclusively operate on the MO side, but I would need more clarification on what metro east means to you.  I know a couple investors with buy and hold properties in Granite City, but the rest of what I would call the Metro East isn't... a place I would want to live.

I couple years back I would run numbers on properties across the river, and nearly every time the higher IL taxes ate up the cashflow.  I cant see how investors are succeeding across the river with taxes like that without higher rents.

IL in general is also losing people on a statewide scale, which doesnt look good for rents and property values in the long run.

Hope thats helpful.

Cheers!

Quote from @Brandon Heimsoth:

Is anyone having trouble with vacancies in St. Louis?  I've had a couple 1 bedroom apartments in a 4-plex that have been vacant for 6+ months.  The property is in North Hamptom.

There is a house across from me that has been vacant for a couple months now. Rent is in line with market rents, so either it's weird inside or the owner is screening too hard.  We are in Dogtown, and there's like 3 other units available, that's it. I can't understand how it's still vacant.

Usually, you are either asking too much for rent, screening too hard for your demographic, or there is an amenity missing from your building that makes it less rentable.

Feel free to reach out and I can help you look for the missing pieces.

Cheers