All Forum Posts by: Matthew Irvine

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $51,000
Cash invested: $26,000
Sale price: $145,000

First REO that I purchased, used a HUD agent that was a real character. Needed a cosmetic rehab, first time I ever used hard money. Ended up being a moderate success.

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

I was open to any investment at the time I bought this. I was really just scouring the MLS for assets that I felt had immediate walk in equity, usually because of some mechanical issue(that wasn't really an issue) and some cosmetic items that were turn offs. This fit the mold for something that would have a strong rent to price ratio and would have that needed walk in equity

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

MLS, my agent told me to call his buddy a HUD agent as that would be the best way to get my offer seen. As I'm typing this idk if HUD real estate agents are even a real thing. But I ended up talking to Skip, and man is he a character. I was telling him what I wanted to offer and he said they use a formula and he knew it, he said the lowest I could offer and be accepted was 51,950. It was listed at 70k, I offered what he said, the offer was accepted.

How did you finance this deal?

Hard money lender: 12 month term, IO payments, 2 points, 10% interest.

How did you add value to the deal?

Replaced the HVAC, upgraded the kitchen cabinets, paint and new flooring through out. ARV upon completion was 145k

What was the outcome?

Renovation took about 45 days, tenant moved in from AZ and took it the day we completed for 1,400 a month. 18months later he bought the property for 145k.

Lessons learned? Challenges?

Don't ignore spaces! We knew there had been water intrusion in the basement in the past. The property was on a hill that was basically a rock shelf, when it rained water flowed right under the foundation. One storm the drainage system that was in place and working, had an issue. After a serious clean up and a few days of stress, we installed sump pump and more fully resolved the issue. That headache could have been avoided if we had more thoroughly assessed risk factors before completion.

Learned a lot, made a ton of mistakes, spent way too much time thinking I was "saving" money.  Im just getting my profile built out, this was back in 2018, I have done quite a few since this project.  Still learn on each one tho.

Thanks a lot! This project was one I muddled through solo.  I was living in stamford at the time and tried to work longer days, lack of experience led to them being even longer.  I really only laid some laminate in the upstairs bedrooms, some base trim after that, then painted everywhere, 3 weeks of total work(maybe).  Something that would take maybe a week now that I have experienced some unit turns.  

If you end up looking up that way, give me a shout, I have a decent network up there at this point.

Investment Info:

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

Purchase price: $72,000
Cash invested: $75,000

3-Family gut remodel, large triple decker style building with a flat roof. We opened the living spaces with out altering the bedrooms and adde a half bath in each unit. End product was 3 - 3 bed 1.5 bath units that are each over 900 sqft.

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

At the time me and my brother had just partnered on a turn key townhouse and were looking to step into a larger value add project. We searched the market looking for something in really rough shape and came across this.

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

We found this deal on the MLS, 2018 in northwest CT still had quite a bit of REO inventory, as well as just heavily distressed assets well below market price. This was listed at 90k and we worked back and forth to end up at 72K which honestly felt like we were slightly overpaying.

How did you finance this deal?

Cash

How did you add value to the deal?

Full renovation, all new everything.

What was the outcome?

After fully renting the property we were able to cash out refi at a value of 225k, we were into the building for approx. 185k so this was close to a full cash out. 3 years later with some small rent increases and rising prices we were able to refi again at 275k, the building is currently worth closer to 295k.

Lessons learned? Challenges?

At the time the lesson was to make sure that your desire for a deal doesn't lead to overpaying. We really should have paid less, there are a few unresolved issues that we ran short on capital for on the front end. We have slowly been resolving those on the back of the strong valuations of recent years. If the market hadn't done what it has over the passed few years, those improvements would have been put off even longer.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $55,000
Cash invested: $33,000
Sale price: $80,000

Foreclosure deal that I did in partnership with my brother, the goal was to be a long term rental as the market rent for the property after a quick paint job was $1,000 a month. As time went on and goals were better defined between my brother and I we decided to dissolve the partnership.

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

My brother and I had worked together on my last project and talked about partnering on the next. The goal was to find a solid starter property that wouldn't require much in the form of remodel or maintenance, this property met both criteria.

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

Nothing special, listing I believe was close to 70k but the market was still very soft at the time. Properties of that type in that condition(fully functional but dated) were selling in the 40's, while fully remodeled version in the same area were trading at 90 to 100k. I believe we offered 48k, they countered low 60s and we settled at 56k(wanted to be at a 2% deal, we were close).

How did you finance this deal?

Cash. I brought half and my brother brought half.

How did you add value to the deal?

No real value add, just painted and repaired some small issues(minor drywall defects, a vanity, cleaned)

What was the outcome?

This was strange, we rented to a couple that we were certain would live there forever. Older couple that wanted to downsize, I save the details but essentially one day he left for work and never came home. He had emptied the account and ran off, weird series of events. We were able to help her move after breaking the lease, we re rented and then dissolved the partnership.

Lessons learned? Challenges?

At the time the lesson was getting solid base hits at a fair price will still lead to great upside, not sure that advice carries any weight here in 2022. Also, never assume anything about your tenants, people are strange.

Investment Info:

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

Purchase price: $38,000
Cash invested: $125,000

Uninhabitable 2-family, we gut renovated it over the course of 6 months with new everything. It has been rented by the same two tenants ever since.

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

I was looking to get into my first gut remodel. After doing a small commercial apt building(5- units) I decided to take a step back and see if I could add value by getting into projects that were intimidating other investors at the time.

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

The listing was for 52K, I was using the agent that helped me close on my first to deals and who I leaned on heavily for advice. He recommended I get every single quote from all my trades and submit my remodel budget with my offer. I believe the property was taken by the state in the passing of its owner, I don't remember the specifics but I know we needed to justify they price. We submitted everything as if it were going to a hard money lender(as is, reno, arv), and they accepted 38k.

How did you finance this deal?

Cash, at the time I was not working with any asset backed lending company and I couldn't interest any local banks due to my lack of experience and the high risk inherent in the project.

How did you add value to the deal?

We put 100K into the building. Everything was ripped down to the studs, slight floor plan adjustments, then new everything: Electrical, plumbing, HVAC, drywall, floor, trim, etc.

What was the outcome?

The building originally appraised at 155k in my first refinance, and later appraised at 200k in my most recent cash out. Currently the original tenants from my first infill are still occupying the units.

Lessons learned? Challenges?

Learned that I knew nothing about being a GC. I just worked through the problems by grinding away each day, this was inefficient and frustrating, but did lead to massive growth in understanding of building systems. If I could go back to my earliest projects, I would've spent more time looking for a good GC and learning from there execution before jumping in on my own.

I invest heavily in the northwest of Connecticut.  There are still a lot of opportunities to buy cash flow in the old mill towns, but there is significant risks involved if you are not familiar with the ins and outs of each town.  In terms of stable and appreciating markets of Connecticut, they are much more competitive and unless you build out some solid direct marketing, I feel they are overpriced currently.

Investment Info:

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

Purchase price: $265,000
Cash invested: $50,000

5 Unit Apt building. Large Units with decent floor plans, but somewhat of a monster house. Built in the early 1900s it was added to early on and maintained in that form with only minor changes. Wiring and HVAC had been updated after a fire damaged much of the building. 4 3-bed units, 1 2-bed unit. total building size is about 5,500 sqft.

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

After my first deal and many bigger pockets episodes I decided I had to rapidly scale in order to grow. I wanted to go commercial in size (5+) and this is where my search led.

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

The same agent I worked with on my first deal was apart of the brokerage that listed the deal. Very over priced($305,000) but the listing was over 12 months old so I offered $250,000. Countered and agreed at $280,000. After inspection many issues were pointed out, largest being the roof. Re-traded down to 265,000 with some of that coming out of the agents commission as they knew this was the closest they would get to selling this, and they had both sides of the deal.

How did you finance this deal?

I used a local bank that required 25% down.

How did you add value to the deal?

The units where dated and under market rent. I began with the roof, siding and the areas of largest concern. Then slowly upgraded and turned the units as they became vacant.

What was the outcome?

Property was refinanced last year at $400,000, allowing me to pull out more than half of the money I had in the deal.

Lessons learned? Challenges?

Be patient and make sure if you have a major overhaul you know your numbers or bring in some one who does. The income carried the value, but the building was in awful condition and in bringing it to my standards I went way over budget. The rise in market prices saved this from being a very sub-par deal, but only turned it into a decent deal. I learned a lot and don't regret the purchase, but could have better invested that money if I hadn't overreached into such a large project.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $78,000

Purchased from a flipper who ran short on funds mid rehab. I completed the rehab for approx. $12,000 for an all in investment around $96,000. The property rented for 1,200 a month for the first two years but is now rented at $1,500. My latest refinance of this property was at a value of $185,000 for a complete cash out BRRRR deal

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

With this deal being my very first I had reservations about getting into a larger remodel. My agent at the time had worked with this flipper in the past and was an advocate for the work they had done on prior projects. He advised that upon me completing the renovation (Some flooring, trim, paint, and a new boiler) that the property would be worth $120k. Seemed like a conservative starting point so I went ahead.

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

Agent. Seller was asking 85K but was in need of freeing up funds. I offered 72, they countered with 80, I countered with 78 contingent on them replacing all of the windows in the house.

How did you finance this deal?

Cash

How did you add value to the deal?

Distressed owner allowed for immediate walk in equity.

What was the outcome?

Still own it today as a long term rental.

My first foray into REI was a SFR rental, BRRRR. To keep the flowery explanations to a minimum I will just segment the deal as the hosts do so wonderfully on the "Deal Deep Dive."

What: A Single Family Rental in Torrington, CT. 4 Bed, 2 Bath, and approx. 1600 Sqft. The property was owned by a flipper that had a family emergency requiring they sell the property prior to completion. Kitchen remodel, roof and flooring was completed, but there was no boiler or hot water heater, and some additional cosmetic work was needed for rent readiness.

How Did I Find It: I reached out to an agent about another home and he offered to show me several properties. At the end of viewing several multis he mentioned a pocket listing that could be a solid starter deal for someone who was able to buy with cash.

How Did I Negotiate: In hindsight, I overpaid for the property, at the time I think the right price was closer to 70k. In my excitement to get the deal done, I was willing to pay more. The Sellers wanted 85k, but knowing that the building lacked heat and hot water, no conventional financing helped me negotiate that lower. I offered 78k(cash) if they also replaced all of the windows in the house(12 windows).

How Did I Fund It: Purchase price was 78,000 funded from personal savings.

What Did I Do With It: After adding the needed mechanicals, painting and flooring, I was able to rent the property for $1,200 a month. After 2 years I refinanced at a value of $145,000 and pulled all of my capital out. The rental is still a part of my portfolio and currently rented at $1,400.

What did I learn: Lesson 1 - When buying from a distressed seller, be patient. This deal ended up being a strong BRRRR, but I could have saved quite a bit with some better negotiating.

Lesson 2 - Always get multiple quotes for repair work! 6 months in, I had a sewer line backup, I panicked and took the first person available(A Router company I won't name here). They told me the line was cracked and needed to be dug out and replaced(I now have a router guy that assures me this is a classic upsell tactic by this franchise) $5,000 later I now approach situations with a level head and make sure to vet the problem more fully.

Aside from some miscellaneous tenant management issues, this deal was a great start in building my confidence and anchoring my future investments.