All Forum Posts by: Marky Suazo

Has anyone ever worked with EBG Properties, or Riva Ridge? If so, what was your experience with them?

 I was able to get a duplex. I've seen some other duplexes and single family homes for that price. Depends on the neighborhood. it wasn't turnkey. But it did have a management company in place, and two tenants. one of which i gave a notice of non-renewal.

@Dean Dinell do you manage in the 15214 zipcode? also, I'd like to get an idea of market rent for one of the units within the duplex

Below is a brief walk through of my journey in purchasing my fourth deal, a duplex in Pittsburgh. I made plenty of mistakes when I made my first 3 purchases. So, I just wanted to share my experience to help others. This purchase was possible because I sold the property from my 2nd deal at a decent profit and used a 1031 exchange. The details regarding my second and third deal are in links below:

Second deal: https://www.biggerpockets.com/...

Third deal: https://www.biggerpockets.com/...

To provide some background, I began purchasing single families in memphis back in September 2019. I then became interested in small multis because of the possibility of higher cash flow. I know there's a difference of opinion on this, but I've always had a bias towards cash flow over appreciation--but i digress. As we all know, the market has been crazy hot. Shortly after purchasing my third deal, I asked my agent to list my second and third deal (that I just bought a month earlier), just to see what I'd be offered. I got all cash offers on both. I bought the 2nd for $52k and was offered $111k and I was offered $144 for my third deal, which i Paid $105. The offer was from a Hedge fund. I decided not to sell the third because I had it only for 1 month and it was ineligible for the 1031 exchange ( you need to own the house for over a year). While in the process of securing this sale, I was researching markets to purchase a duplex or triplex, and came across pittsburgh.

Property Search

The process of searching for a property was neither quick, nor was it easy. I actually began looking for a new market since March 2021. I started with a google search of agents and property managers. After speaking with numerous agents, I found a group I thought would be helpful. I then asked the agent to set a criteria of duplexes and triplexes below a certain price. I spent a few months looking at the properties she sent me. I then asked that same agent to send me a list of property managers. She sent me a list of about 20-30. I spent a few days calling and researching the PMs. I went with the one she initially recommended. After speaking with the PM, they recommended an agent from the same  real estate company I had been speaking with. It turns out the agent I had been speaking with was the assistant of the agent the PM recommended. After seeing various properties, I made a short list of 5 and scheduled a weekend with my wife to Pittsburgh to visit the properties. Some of them were---rough. The one we chose was fully occupied. first floor is a 1 bedroom and the apartment was in good condition. The second unit is a 3 bed 2 bath that takes up the 2nd and 3rd floor. A single mother with 3 kids lived there. The apartment was in terrible condition. COmpletely packed with junk, smelly, dirty, etc. It was listed for $155k. First apartment rented for $650 on a one year lease and second for $850 month to month. Given the condition of the apartment, we offered $135 and they countered with $140k. I asked for seller assist with closing and they accepted. 

Financing

I planned to use the funds from the sale of my Memphis property as the down payment for this purchase and traditional finance for the rest. Luckily the strict timing constraints in a 1031 exchange werent an issue because I already selected the property. I initially asked my Memphis agent to recommend a 1031 intermediary. I spoke with the two he recommended, but I went with another that was recommended both by a real estate attorney in my firm and a friend who is also a real estate attorney. Their fee was about $1,200 and they were very professional. The bank made me jump through hoops to close. After the appraisal, they had a list of repairs that had to be made to allow the appraisal to hold. After getting it done, we were finally able to close

Post Closing

I closed this purchase in November the day before my wife and I left for our honeymoon ( i forgot to mention i was doing all this while getting married in September lol). As I said earlier in this post, the tenant of the second apartment was a hoarder to say the lease, and market rent for that apartment (once renovated) would be about $1200.. Due to the holidays, I did not want to give a 30 day notice to evict, so I waited until march. I then asked the PM to do a walkthrough of the property and give me an estimate. The estimate I received is over 2.5 times what I thought it would be--$50k or so to get it in good condition. This was based on  a very brief walk through and the apartment was uncleaned and filled with junk. The tenant was then given notice. I plan to obtain additional estimates from other contractors once the tenant clears out, and decide what to do. The renovations might be prohibitively expensive, or it could be worth it since I initially planned to hold this for the long term. Stay tuned! 

 38115 and it was through my agent. He brought me the deal. 

Unfortunately I've been on a bit of a hiatus since my last post. 

Below is a brief walk through of my journey in purchasing my third single family rental in Memphis, TN. I made plenty of mistakes when I made my first two purchases. link below:

https://www.biggerpockets.com/...

The process for this purchase was much quicker and smoother. My ultimate goal was to utilize the BRRR strategy. For those that might be a little impatient, I'll give away the ending: it was successful. i was able to pull out all my initial capital, plus about $5k.

Buy

For those that don't know, I'm an out of state investor and did not have the opportunity to visit this property. Therefore, I had to rely exclusively on my agent. I worked with the same agent as my second deal. I was comfortable with him and he was very straightforward and honest with me. He sent me video walkthroughs of the house and gave me his honest opinion. I told him what my general criteria was and he sent me this house to analyze. he property was already rented for for $1034 by the same property manager I used for my first property. I asked for rent rolls, and the tenant was current and 11 months into a 2 year lease.

It was listed for $120k, and I offered $112k. After some additional information, my realtor suggested the roof would need some work and that it would cost about $6-7k to repair. So, I made an adjusted offer of $105k(after we were under contract). The seller was motivated and accepted, my offer was all cash. I used the funds from a HELOC that I have access to--HELOC payment was about $345.

Rehab

I obtained 3 bids for the roof work and, through my agent, was able to secure someone to do it for $5900 (the other two bids were $3-4k more). Shortly after the purchase, there was a big storm  that caused a tree to fall and damaged the rain gutters of the house--luckily nothing else. A few hundred dollars to repair. I also had to replace a mailbox, and some other minor repairs. 

Rent

As i mentioned above, this property was already rented. The tenant was 11 months into a 2 year lease, current with his payments and paying $995 a month, with a built in rental increase of 4% after year 1. The tenant's lease will end in July 2022 and according to various calculators, the current market rent is about $1200.

Refinance

I officially closed on this property on June 4 and the banks typically require a 6 month seasoning period. Since the property was rented and covering the HELOC payment, I wasn't in a hurry to pull out my capital. And I did not want to be limited to pulling out only the cost of the property plus repairs--I had a feeling it could appreciate for a lot more. Fast forward to December 4 and I began the refinance process with a lender I used to purchase my Pittsburgh duplex (more on this in a separate post). I compared 3 or 4 different lenders--and thank goodness I did because i saved about .5% in the rate. And the moment of truth finally comes--where dreams are either made or broken: the appraisal.

I finally get the report back and the house appraised for about $162k. I was able to take out 70% and after fees I pulled out about $118k. I was all in for $112k. 

Repeat

I haven't repeated yet. I used the money to payback the HELOC, the extra money I used to buy some REITs and dividend stocks.

If anyone would like to speak to me in further detail about this deal, i'd be happy to connect. I will post about another transaction I completed around this time: A sale of my second property and using a 1031 exchange to shelter the profits from taxes and purchase a duplex in Pittsburgh. 

Investment Info:

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

Purchase price: $135,000

I used a 1031 exchange to purchase this property

An update on this deal:

I sold this property for $111k, I paid $52k for it and used a 1031 exchange to purchase a duplex in Pittsburgh.

Hi BP quick question: Currently under contract on a property and received the inspection report. A few concerns popped and I'm wondering based on those findings how common is it to ask for a reduced price and/or to fix several items in the report?

main concerns are 

Common areas

1. rusty railings and delamination

1. porch roof leak

1. exterior wood rot on soffit and Fascia (roof is 2 years old?)

1. various windows would not open

1. wood rot on the deck

1. the extensive growth all over the house (as lindsey mentioned when we saw the property, it looks like the lawn maintenance has not been done in awhile)

Basement

1. possible mold

1. evidence of moisture (not a huge concern, but still noted)

1. wood rot

1. amateur repair on the main water supply line (fairly concerning because we'd have to pay a plumber to take a look)

Apt 1

1. Light switch did not work when we visited

1. hot and cold plumbing lines reversed

1. water marks in bathroom ceiling. potential leak. (this is the apartment that was just renovated)

Apt 2

1. The inspector was unable to access the bathroom on the third floor because it was so cluttered

1. Much of the apartment was not able to be inspected because it was so cluttered

1. potential asbestos in fireplace

1. A light switch did not work

I appreciate the insight!