Hello,
I am new to Bigger Pockets. I have listened to the podcast on and off for the last couple years and have been interested in real estate but for the past 3 years was working on an internet startup. Although showing great potential the start up ended up not working and now I want my sole focus to be on putting together as many rental units as possible in the coming years.
Bio,
I'm from Minneapolis and have been in the trades for 20 years. I spent 5 years in New York City working on High End remodeling projects and have had the privilege of studying at the feet of master craftsmen. I got married 7 years ago and moved back to Minneapolis (My wife didn't like the big city) where I flipped my first house doing all of the work myself. Made $80k profit from the sale in a bad market which I split with the money lender. After that I worked for people remodeling homes. I wanted to try something different and for the past 3 years I worked on a start up. When that ultimately didn't work out I have been reevaluating what I want moving forward. Looking at my strengths and skills I have decided I will never get where I want to be working for others remodeling their homes.
I recently have moved to California where I came to help my brother in law build a 2 bed apartment on the back of his house. I ended up building 2 1 bedroom apartments which will make him more in rent and My wife and I decided to rent one. Since being in California I have helped a couple flippers remodel homes and have learned more about real estate and I have decided I can utilize my construction experience/know how along with an aptitude for maximizing the potential in a building by adjusting layout and achieving the best bang for a buck possible.
I've been working on a business plan and am here to get feed back and hear experience from people who have done what I intend to do. My thought process is I want to buy Multi family homes that are in disrepair and need extensive work. I want to fix them up and make them nicest rentals in the area. Seems out east in the upstate New York, Pennsylvania and Connecticut area there are alot of 4-6 plexs that I can purchase for $50-75k that need $75k worth of work but average apartment rents in the areas are 1k per unit per month when rented.
I would like to find an investor that will lend me the $150k upfront so I can purchase and remodel the property and when fully rented get traditional funding for the property. The value of the property would be considerably improved so getting a mortgage to recoup the $150k I think would be very realistic. After crunching the numbers it seems planning on a 10% vacancy rate and factoring in a property manager the cap rate should still be close to 20% on the buildings I'm looking at. When the mortgage goes through I would like to repeat the process.
I feel my core competency would be remodeling the structure to a high standard while saving a huge amount of remodeling fees through expertise, creativity and elbow grease. Also by starting fresh with a run down project I will be able to use my Design ability to make Very comfortable, high end feeling apartments for less then most people could pay someone to do a low quality updated apartment with all the weird layout and initial problems.
I would love to meet any of you who have suggestions or feed back on the realities of making a business plan like this come to life. I look forward to hearing from you!
