All Forum Posts by: Lucas Mobley

Just closed on 1st duplex. Needs around 20k worth of rehab to get where it needs to be in order to complete brrr for the purchase of a primary. Wanted to live in one unit and take my time doing the work over the next year and then refinance it. Things have changed on macro level since October however and I want to put this brrr into ASAP mode because of the fed taper and resulting mortgage rates creeping up the next year. It just makes more sense logistically to do it before the spring. I have no debt other than a car loan and this 1 duplex. Have construction background and completed one flip already. Tried home depot project loan and was only approved for 5k. Have three years with same employer as well. Could probably use savings and max out my credit cards and liquidate other assets and maybe squeeze by, but, it would leave my financial footprint looking rather sloppy and in rough shape when it comes time for refinance/next purchase. I have good credit. Just not a long history. Any ideas greatly appreciated.

@Robert Taylor Talked to my lender about a 4plex with conventional. I could do 5% cash down but they'd require me to keep 6 months worth of payments on reserve at all times.

Ill have to add up receipts but it was probably closer to 12k. Doing it myself saved money but was physically and mentally exhausting. As far as inside I gave all the original trim a good sanding and used emerald urethane enamel to make it pop and protect it. ($100 gallon). There were a million nail holes to fill and cracks in most of the walls to fill. The prep work Good quality paint is worth it in my opinion. 

As far as age used as an advantage, it's definitely a possibility depending on homes condition. I could talk for days about the pros and cons of historic homes but the most important part in my eyes is a solid roof, structuraly sound foundation/beams/crawlspace, and updated electric. If those areas look good, everything else is doable without spending a fortune. 

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $100,000
Cash invested: $8,000
Sale price: $174,900

Single Family Home in Historic District
3br 1.5br Colonial
9ft ceilings
Original window and door trim
2 story

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

Making all the wrong choices when I was younger hasn't allowed me to break past the lower middle class. It was the only feasible solution to gain enough capital to potentially have a shot at securing a solid cash flowing multi unit rental property and begin a portfolio. It also helped me to gain some legitimacy and experience along the way.

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

Had an issue with a long time landlord and my fiance and I needed him to get us into a different rental fast. He had just evicted the previous tenant of the property. It was eccentialy condemnable and he gave us a good monthly lease of 1000 (would have been 1300-1600 in good condition) for agreeing to clean the house thoroughly. He also knew we were great tenants. Knew he only paid 40k for the place in 2016 so I offered him 100k for it. He laughed and said sure, "if you can get the money...".

How did you finance this deal?

First home purchase ever and secured loan with USDA backed financing. I only had enough to cover an appraisal and inspection. I didn't even have enough to cover closing costs. I had that financed as well. Made it to settlement by the skin of my teeth (debt to income ratio was excellent) after being underwritten twice.

How did you add value to the deal?

Needed paint throughout, every faucet and toilet replaced, new stainless appliances, total exterior face lift, new hotwater heater, new textured laminate flooring, crawlspace treatment, and over all attention to derrered maintenance. That's only about half of the work. Kitchen and br cosmetic upgrades also.

What was the outcome?

I go to settlement in 6 days and barring any unforseen complications, I'll clear around 55k after fees.

Lessons learned? Challenges?

I learned to hire the best inspector you can find. Even if you feel you're competent and know the property, a seasoned set of eyes never hurts. The biggest challenge was doing a fix and flip with no money while also having to live in it and maintain full time employment to allow the "fix" part to happen lol lots of PB and Js.

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

Yes