All Forum Posts by: Marco Fontana

I'm looking to purchase my second rental property in Springfield, MA. Currently looking at a 3 family in a C/C- area. My plan coming into this area was always to transition to Section 8 tenants. The property I'm looking at already has two Section 8 tenants, but the rents they pay are below the fair market rent for the area. HUD fair market rent for a 3 bed is $1,404. Current rents of the two 3 bed units are $1,250 and $1,000. The units aren't in amazing shape, but probably a paint job and some minor repairs away from being good shape for the area.

My question is, why would the two section 8 units be so far below FMR? Is it possible the current owner just hasn't gone back to the housing authority to request a rent increase? At least one of the tenants is less than a year old. If this is the case, when I buy the property, can I go right to the housing authority and request to raise rents to the FMR with the current tenants in place? The property is okay/not so good deal with current rents, but if I can raise all to FMR, it's a great deal.

Very curious on the process of inheriting Section 8 tenants and the success in raising their rent closer to FMR, without having to put in new tenants

Investment Info:

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

Purchase price: $365,000
Cash invested: $93,000

4 unit, 13 beds/4 baths (5, 4, 2, 2)

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

Strong ROI in this area, especially with Section 8 tenants. Found this place that needed some work done, but has lots of bedrooms and cost was similar to much smaller properties with minor improvements.

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

Found on MLS, got offer accepted below asking, and negotiated closing cost credits based on inspection

How did you finance this deal?

Conventional 25% down

How did you add value to the deal?

Planning to do minor renovations and raise rent by bringing in section 8 tenants

Hoping for a recommendation or reference to lenders in the Albany area. I've talked to a few of the local banks; CapCom, SefCu, but both had non-competitive rates and added points for cash out refis. Does anyone have experience with investor friendly lenders in the area?

@Michael Hastings, and everyone else. I'm hoping I can pick your brain quickly. I'm new to this too and currently searching for a house hack near Boston. Given the numbers/scenario here: 

Mortgage $1,750

Rent Income $1,200

Owner Payment $550

Wouldn't the additional maintenance costs eat away at the rent income and make this a bad deal? Say it's 50% ($600) of cost of the other unit rent for vacancy, CapEx, repairs (and some for his own half), that would put the total Owner payment at $1,150. Given that this is essentially break-even, wouldn't that make this a bad deal? Obviously, I get that building equity, experience, etc is great with a break-even, but seems to miss the goal of a house hack, which is to reduce your rent and free up cash for investing.

Did I miss something here in my calculations? Or am I looking at this wrong?

Hi everyone. New member here looking to get started in buy and hold rentals. I'm having some issues wrapping my head around how to get renovation cost estimates when investing remotely, or even in my area. I live in Boston, but have some realtor connections in upstate NY and Houston, TX. 

I'd have no issue driving over to NY to check out the houses myself or having my realtor connections send pics, etc, but what is the typical process for getting contractors to provide estimates before actually buying the house. I've read a few posts and watched a lot of BP vids on estimating costs, but was hoping there was a way to get an exact number before buying a house. 

Is it typical to get in contact with a General Contractor and have them visit the house with the realtor to give an estimate? Also, if I'm trying to get multiple GC bids, my thought was to have them all show up at the same time to get a walk through of the house with my realtor and provide me bids after.

Is this the common practice? I just don't want to have GCs show up to a house if it's not commonplace, but I'm also not comfortable with buy house that needs TLC, without getting close to exact numbers for renovation costs. Looking to use BRRRR as my strategy.

Thanks in advance.

Hey everyone. I'm planning for my first real estate adventure and hoping to do a BRRRR in upstate NY. I live in Boston, where it's far too expensive, at least for a first timer, but have family within driving distance to NY where prices are much cheaper. I understand all the steps of BRRRR and the strategic aspects at a high level, but have a question around the tactical financing piece.

When working on the initial payment for the dilapidated house, what kind of financing is typically used, and are the cost of the repairs/renovations included in that loan? I'm trying to keep my out of pocket money low and put more on the loan so i can depreciate it over time, rather than paying up front and losing the cash all at once. 

Do people usually use a standard bank loan and pay the 20% cash down then pay cash for repairs?

Is there a type of bank loan that can can cover the expenses as well and I still just pay 20% on a larger amount?

Also, should i be looking to use the same bank for the original loan to buy the house and for the refinancing portion? And, if I am using the same bank for initial loan + reno expenses, what is the point of refinancing at all? Would it be for a lower interest rate?

I'm sure there are some other posts on this so feel free to redirect me if anyone has a good string to read through.

Thanks