All Forum Posts by: Martin Lindsay

Investment Info:

Single-family residence buy & hold investment in Kannapolis.

Purchase price: $88,000

A perfect no money down BRRR!!

This was my first deal and definitely solidified my love for real estate investing! It also allowed me to fully understand the power of providing value and building relationships.

Buy - $88,000
Rehab - $700
Refinanced - $93,000
Rent - $1200

Cashflow - $300/mo

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

I knew the property was a good deal and under market value in its current condition, and the wholesaler wanted $88,000 for it.
It was a 2009 manufactured home on a permanent foundation in excellent condition.

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

My lender and I both wanted to get the property appraised to that we knew it would work out for us, but obviously I didn't want to put down an EMD without knowing if the deal would even work. To demonstrate value while asking for value in return, I told the wholesaler I would pay them their full asking price if they let me get the property appraised first.

A bit of hustle later, I got it appraised the NEXT MORNING and the report came back that evening and it appraised at 124,000.

How did you finance this deal?

I networked with a colleague off of the BP forums, who ended up being my private lender on this deal. They funded 80% LTV, roughly ~70k, and I was to come up with the 20%. I had some cash and a HELOC on my personal property, but I also had a close friend who had been wanting to passively invest to get better returns than his savings account, and I knew the deal was sound enough. He loaned me the 20% that I needed, which allowed me to use my funds on another project simultaneously.

How did you add value to the deal?

Very minor cosmetic repairs. The property had a lot of built in equity already being well under market value.

What was the outcome?

I refinanced at 75% LTV which was roughly 93k for the new loan, which covered the payoff for my lender, his interest and points, as well as my friend along with his interest too.

Now I have a property cash flowing a little over $300 a month and about 30K in equity.

Lessons learned? Challenges?

This one went as smooth as possible for the most part, so not too many big lessons learned just a better understanding of the business and the process.

However the challenges were all centered around financing. Manufactured homes are difficult to finance especially as a full time investor who no longer has W2 income. Even most hard money lenders with rental loans won't touch manufactured homes.

@Bob Norton Great points Bob, thank you. I’m certainly not banking on appreciation, but my point in mentioning the home next door that sold 2 years ago is to illustrate the market value at that time, and since then the market as continued upwards and values would have appreciated.

I guess I was looking at it more through the eyes of an end buyer and what they would see as desirable, rather than taking more into account for what the appraiser would see.

Alright gang I need some insight here. I’m under contract to buy a great house that’s in a very desirable neighborhood, part of the Historic District in Gastonia, NC. Not even a mile from downtown where they just broke ground on a big development for a baseball stadium and multi use complex, and a renovated mill turned high end apartments.

I’m buying it from a wholesaler, whose contract price is 130k. I’m buying it for 145k, gonna put in 20k in updates and be all in for 165k. Tax value alone is 171k. The house is in amazing shape as is. Easily livable. All the work I’m doing is just cosmetic updates. New kitchen appliances, counters, cabinets, and painting inside and out etc.

Appraisal came in with the "as is" value at 130k, and the ARV at 195k.

Now I understand that the appraisers really just look at the numbers and accurate comps, and that’s how they come up with their value. And she looked at all the right comps. The trouble is that this neighborhood is so established that people don’t move in and out very often. The average resident in the neighborhood has lived there for 15+ years. The house next door is nearly the same size and sold for 205k in 2017. That was 2 years ago and doesn’t take into account the value that the new development down the road brings.

I had my ARV at 220k, taking into account the neighborhood, market trends, comps etc. but now I'm a little nervous to try and flip it and put that price tag on it, only to have a buyer get it appraised and they come up with 195k too.

Am I hanging on by a thread here? Living on a prayer? Shooting in the dark? Any insight is helpful!! Thanks!

North Carolina coming anytime soon?

@Jared Rine Thanks for the response Jared. I've found some options but I'm still looking for anything that might suit me better. In terms of flexibility I'm open to see what's available. 

Hey BP! I'm looking for any suggestions for local portfolio lenders to park some loans and refinance with. Ideally I'd love to refi at 80-85% LTV but 75% is fine. Mostly SFHs and one manufactured home. I've already spoken to a few local credit unions (Truliant, Allegacy, Sharonview) but they don't offer asset based investor loans. Any recommendations would be truly helpful!!

@Ben Gabin

Quick google search will show you your local real estate classes for pre-licensing. Cost me about $500 but I’ve heard there’s cheaper out there which I don’t doubt

Oh and exit strategy would be to buy and hold long term, however a short term loan for just the acquisition then refi later is also an option.

Looking for a lender that can fund the purchase of a manufactured home. This is not the typical mobile home trailer but rather the type of MFH that stays put. Purchase price is 88k, turn key condition with a long term tenant paying 1000/mo. Theres lots of equity in this property as it's well under market value. Comps suggest it would most likely appraise for 115-120k as is. PM if you are interested thanks!

Honestly, nearly everywhere. 

But to answer your question specifically, I look at zip codes that surround areas that are already popular and happening because that's where the growth will expand to. For me 28205, 28206, 28208 are huge for increasing home value through forced appreciation (Flips, BRRRs.) 28227 and 28217 seem to have pretty strong rental markets for BRRRS and Buy and Holds. Obviously these strategies may intertwine with what you find, but as a whole I keep stumbling across new areas of Charlotte that are beginning to produce great opportunities. 

Hope that helps!