All Forum Posts by: Lynne Hart

BY the way, we have listed these FSBO here on Bigger Pockets and would sell if we can close in 2024, and take advantage of some tax writeoffs from another project. In case anyone's looking for a little ATM. I also know at least one commercial lender that would have a rate available in the low/mid sixes.

 Absolutely, you can't get these deals anymore - and it felt a bit 'edgy' with both purchases, but here's to trusting a gut instinct!

 Thank you!! ;)

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $119,000
Cash invested: $200,000

This is maybe a new Category: BRRRRSR Buy Renovate, Rent, Refinance, Repeat, Sell, Repeat. Let me explain:
Bought each of two four family buildings in 2016 and 2019. BRRRd and held. New sewers, roofs, tuckpointing and updated units with new leases and higher rent. Selling them together at a 9% cap rate would likely be successful as 8 units are unusual and the price point ($775,000) makes them accessible and unique for someone with a smaller amount who is getting started in bigger buildings

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

In the beginning it was the price for the opportunity. You could still get cheap stuff and cheap labor, and rents while low still resulted in about a 25% return. As rents grew, it became much more viable to the point that now, 8ish years later we are looking at moving on to the next level. The current market conditions and the property opportunity are what have us considering that!

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

The first four family found on the MLS in distress, and acted FAST. The second, neighboring 4 family we learned about from a tenant-neighbor. The seller had offered to sell for a crazy price. We found our way to him and then his lawyer. He was in foreclosure. His lawyer suggested a short sale and an even crazier low price (44k) as it was now completely vacant. We followed his lead and they didn't even negotiate!

How did you finance this deal?

First one was a commercial loan, second one was cash. Renovations for the first one were in cash, renovations for the second one were from the cash out refinance from the first (first appraisal in 2019 was a 150k value on our 75k purchase.

How did you add value to the deal?

Adding full kitchens, debugging the apartment, upgrading tenants as they moved out. Working with the local police department as the first building was on the problem properties list, and actively working with neighbors and the neighborhood. the 2nd building was completely redoing all the cosmetic things. Opening a few walls, updating kitchens and baths, flooring lighting, etc. Same thing in the first buidling but we took it up a notch with this one.

What was the outcome?

Individually both buildings are worth well more than their purchase and investment price, and together they are even more valuable. AS well they are both stable and producing quite a bit of monthly income. We're happy to sit on them or sell out, pull out our equity and move on and up.
Technically they are two 4plexes, so they *could* be purchased with 2 conventional loans - however the appraisal would have to be based on the income method. These babies bring in over 85k Gross and 72k

Lessons learned? Challenges?

UGH so many. This one is/was a C- or worse at the beginning and now they would be about a B quality buildings in a Cish neighborhood.

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

Yup, ME. I'm a realtor and an investor. As a realtor I help others buy and sell multifamilies and connect them with resources as needed via referral. Happy to connect and help or share lists of lenders and other resources.

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $119,000
Cash invested: $200,000

This is maybe a new Category: BRRRRSR Buy Renovate, Rent, Refinance, Repeat, Sell, Repeat. Let me explain:
Bought each of two four family buildings in 2016 and 2019. BRRRd and held. New sewers,roofs, tuckpointing and updated units with new leases and higher rent. Selling them together at a 9% cap rate would likely be successful as 8 units are unusual and the price point ($775,000) makes them accessible and unique for someone with a smaller amount who is getting started in bigger buildings.

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

In the beginning it was the price for the opportunity. You could still get cheap stuff and cheap labor, and rents while low still resulted in about a 25% return. As rents grew, it became much more viable to the point that now, 8ish years later we are looking at moving on to the next level. The current market conditions and the property opportunity are what have us considering that!

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

The first four family found on the MLS in distress, and acted FAST. The second, neighboring 4 family we learned about from a tenant-neighbor. The seller had offered to sell for a crazy price. We found our way to him and then his lawyer. He was in foreclosure. His lawyer suggested a short sale and an even crazier low price (44k) as it was now completely vacant. We followed his lead and they didn't even negotiate!

How did you finance this deal?

First one was a commercial loan, second one was cash. Renovations for the first one were in cash, renovations for the second one were from the cash out refinance from the first (first appraisal in 2019 was a 150k value on our 75k purchase.

How did you add value to the deal?

Adding full kitchens, debugging the apartment, upgrading tenants as they moved out. Working with the local police department as the first building was on the problem properties list, and actively working with neighbors and the neighborhood. the 2nd building was completely redoing all the cosmetic things. Opening a few walls, updating kitchens and baths, flooring lighting, etc. Same thing in the first buidling but we took it up a notch with this one.

What was the outcome?

Individually both buildings are worth well more than their purchase and investment price, and together they are even more valuable. AS well they are both stable and producing quite a bit of monthly income. We're happy to sit on them or sell out, pull out our equity and move on and up.

Technically they are 2 four families, so they *could* be purchased with 2 conventional loans - however the appraisal would have to be based on the income method. These babies bring in over 85k Gross and 72k

Lessons learned? Challenges?

UGH so many. This one is/was a C- or worse at the beginning and now they would be about a B quality buildings in a Cish neighborhood.

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

Yup, ME. I'm a realtor and an investor. As a realtor I help others buy and sell multifamilies and connect them with resources as needed via referral. Happy to connect and help or share lists of lenders and other resources.

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $119,000
Cash invested: $200,000

This is maybe a new Category: BRRRRSR Buy Renovate, Rent, Refinance, Repeat, Sell, Repeat. Let me explain:
Bought each of two four family buildings in 2016 and 2019. BRRRd and held. Did improvements as required and now they have new sewers, new roofs, tuckpointing and updated units with new market leases and are chunking out the change. Selling them together at a 9% cap rate would likely be successful as 8 units are unusual and the price point ($775,000) makes them accessible and unique for someone with a smaller amount who is getting started in bigger buildings. Technically they are 2 four families, so they *could* be purchased with 2 conventional loans - however the appraisal would have to be based on the income method. These babies bring in over 85k Gross and 72k net! They are neighbors and practically twins....and they make sense together. Not actively marketing them (2024 Aug) but we believe our next move with these will be to sell them to a turnkey buyer, maybe a 1031 exchange (circa 2025 Spring) - and then exchange out to either a larger or higher class property and continue the circle of money! Or if it doesn't work out the way we envision, it certainly makes sense to hold them!

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

In the beginning it was the price for the opportunity. You could still get cheap stuff and cheap labor, and rents while low still resulted in about a 25% return. As rents grew, it became much more viable to the point that now, 8ish years later we are looking at moving on to the next level. The current market conditions and the property opportunity are what have us considering that!

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

The first four family found on the MLS in distress, and acted FAST. The second, neighboring 4 family we learned about from a tenant-neighbor. The seller had offered to sell for a crazy price. We found our way to him and then his lawyer. He was in foreclosure. His lawyer suggested a short sale and an even crazier low price (44k) as it was now completely vacant. We followed his lead and they didn't even negotiate!

How did you finance this deal?

First one was a commercial loan, second one was cash. Renovations for the first one were in cash, renovations for the second one were from the cash out refinance from the first (first appraisal in 2019 was a 150k value on our 75k purchase.

How did you add value to the deal?

Adding full kitchens, debugging the apartment, upgrading tenants as they moved out. Working with the local police department as the first building was on the problem properties list, and actively working with neighbors and the neighborhood. the 2nd building was completely redoing all the cosmetic things. Opening a few walls, updating kitchens and baths, flooring lighting, etc. Same thing in the first buidling but we took it up a notch with this one.

What was the outcome?

Individually both buildings are worth well more than their purchase and investment price, and together they are even more valuable. AS well they are both stable and producing quite a bit of monthly income. We're happy to sit on them or sell out, pull out our equity and move on and up.

Lessons learned? Challenges?

UGH so many. This one is/was a C- or worse at the beginning and now they would be about a B quality buildings in a Cish neighborhood.

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

Yup, ME. I'm a realtor and an investor. As a realtor I help others buy and sell multifamilies and connect them with resources as needed via referral. Happy to connect and help or share lists of lenders and other resources.

 Thanks @Matt Quinn We may have someone who would do this but it would likely cost more than what you might think.  We focus on sales and purchases, but you might be able to find a property manager who would just do the showings....... they all offer various levels of services......

Investment Info:

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

Purchase price: $90,000
Cash invested: $50,000
Sale price: $289,000

4 family building purchased in distress in Mount Pleasant neighborhood, previously owner occupied for quite some time, the owner could no longer care for it. We prettied her up, gave her a new sewer, new roof, new garage roof, cleared out a ton of junk, and put this into production in 2020. Al 2 bed 2 bath units with updated open kitchens and modern baths, some with deep tubs! A 3 car garage in the back is just waiting for us to add electric doors and rent it out.

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

It was a working building for $90k that just needed some cosmetic updating. 2 bedroom units and a 3 car garage.

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

It was on the MLS for a while and the price was too high, negotiated quite a bit and then found a sewer issue and negotiated some more!

How did you finance this deal?

Conventional loan and renovated in cash.

How did you add value to the deal?

New kitchens, some new baths, flooring, a new roof and a new sewer.

What was the outcome?

Rented at top of the market and was able to sell after 5 years of generating 30k annually, at a rougly 125k profit above what was spent to purchase and renovate.

Lessons learned? Challenges?

The area was a little rough and tenants were hard on the units. Having the rent higher might have gotten better tenants.

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

Yes and I'd be happy to share them if we end up doing a deal together.

Investment Info:

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

Purchase price: $465,000
Cash invested: $125,000

Four Family Property bought in an exchange, was in fantastic condition with just one unit that needed to be made rent ready. Updated cosmetically, added in unit laundry and new appliances. One is a furnished corporate rental and the other three are market rate unfurnished rentals, right in the heart of St. Louis's Central West End neighborhood, walkable to various hospitals, educational institutions, and the cortex, which is an innovation incubator.

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

The location is superb and the price was perfect for the area, where there are a limited number of multifamily buildings. There was a comp that was just a little better in condition that was a $650k sale within 1 year.

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

I'm a realtor and an investor who works for realtors, and so I always have my eyes on things coming to market. A colleague listed this and I had it toured and contracted on the same day.

How did you finance this deal?

Funds from a 1031 exchange and conventional financing.

How did you add value to the deal?

Cosmetic updates, some new windows, tuckpointing, new doors and just raising the rents where they hadn't been raised in years.

What was the outcome?

CASHFLOW!!

Lessons learned? Challenges?

We had a surprise at the end when we were getting ready to re-rent and had gas leaks in all of the units. We aren't sure what the cause was but had to rerun lines that were leaking, even in use!

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

Tons, and I do all the time.

Thanks Ken!