All Forum Posts by: Matthias Pieplak

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $165,000
Cash invested: $47,500

I bought this move-in-ready 4 bed, 2 bath with 3.5% down, only to change my mind about a week after closing. In my market rent projections would have put me at 300$/mth cashflow. Instead, I am investing an additional $15,000 (included in the $47k) to set up an Airbnb that is projected to earn $19,000 p.a.

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

Move-in-ready single family, good layout and in a stable neighborhood with 11% Cash-on-Cash (initial plan). Luckily, I already have an experienced Airbnb host at hand who can take over the management once I go live. This will be my first property solely dedicated to short-term renting, which is why this project is especially exciting. I can't wait to see a year from now, how it performed during its trial period, while looking to open up additional short-term rentals in the meantime.

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

MLS/Zillow... Highest offer out of 5 after another buyer's cash offer fell through... Pushed on obvious issues in inspection report to get concessions.

How did you finance this deal?

Conventional, 3.5% down

How did you add value to the deal?

By reading the market and seeing its long-term potential. The property was priced right to sell fast and I was ready. It appraised 12% over asking price. In today's market, one month later and considering the limited local inventory , it could sell for $185k, 25% over asking price (12% over purchase price) with minor upgrades. I.e. it is unlikely to go under water even in a market downturn and even more important the cashflow forecast for a short-term rental conversion is phenomenal.

What was the outcome?

Projected amortization in 2.5 years and $19k p.a. cashflow going forward.

Lessons learned? Challenges?

Once again, I was happy to get a property under contract with a strong offer and get concessions later.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $165,000
Cash invested: $47,500

I bought this move-in-ready 4 bed, 2 bath with 3.5% down, only to change my mind about its strategy a week after closing. In my market rent projections would have put me at 300$/mth cashflow. Instead, I am investing an additional $15,000 (included in the $47k) to set up an Airbnb that is projected to earn $19,000 p.a. Luckily, I already have an experienced Airbnb host at hand who can take over the management once I go live. This will be my first property solely dedicated to short-term renting, which is why this project is especially exciting. I can't wait to see a year from now, how it performed during its trial period, while looking to open up additional short-term rentals in the meantime.

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

Move-in-ready single family, good layout and in a stable neighborhood with 11% Cash-on-Cash (initial plan).

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

MLS/Zillow... Highest offer out of 5 after another buyer's cash offer fell through... Pushed on obvious issues in inspection report to get concessions.

How did you finance this deal?

Conventional, 3.5% down

How did you add value to the deal?

By reading the market and seeing its long-term potential. The property was priced right to sell fast and I was ready. It appraised 12% over asking price. In today's market, one month later and considering the limited local inventory , it could sell for $185k, 25% over asking price (12% over purchase price) with minor upgrades. I.e. it is unlikely to go under water even in a market downturn and even more important the cashflow forecast for a short-term rental conversion is phenomenal.

What was the outcome?

Projected amortization in 2.5 years and $19k p.a. cashflow going forward.

Lessons learned? Challenges?

Once again, I was happy to get a property under contract with a strong offer and get concessions later.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes.

 Hi Alana,
I saw your post that you went through with buying a fix-and-flip in June. Whether it was this house or another one, Congrats!
I am curious to hear, if you want to share what kind of work do you contract out vs diy? Cheers!

@Jennifer Williams, @Dmitriy Fomichenko

I fully agree! We didn't know how much we would like living in it, until a few months had past.

You are trading character for some modern conveniences, though. Something to be aware of for anyone interested in an old house that has not been fully updated.

Investment Info:

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

Purchase price: $122,000
Cash invested: $57,000

Cash flow: $950

2-units, 2,700 ft2. Each unit has 2 bed, 1.5 bath a finished attic room and a full, half-finished basement.
Structure: 2-story, wood frame, aluminum siding, composite roof, 2 fireplaces

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

It was the house next door. A duplex and in need of repairs. The ideal rehab opportunity the get into rental houses.

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

Former tenants told us it would come up on the market. After my first attempt to personally contact the owner/listing agent weren't taken serious, we got ourselves a local realtor with rental-property experience who had a reputation for staying on top of things.
Offered full asking price. Negotiated after inspection, despite listed AS-IS.

How did you finance this deal?

Equity partner and again, GuaranteedRate. Co-signers.
25% down, 3.5% interest, 30-year-fixed.

What was the outcome?

We closed 33 days late due to underwriting, but well within our budget.

Lessons learned? Challenges?

Understand the difference between a residential vs. investment mortgage, and what consequences that has for your underwriting requirements.
When working with equity partners, structure your finances well ahead of time.
Consider working with local lenders over nationals.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Brandon Johnson with ERA Martin & Associates

Investment Info:

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

Purchase price: $139,000

Single family with mother-in-law suite, former 2-apartment set-up. 4 bedrooms, 2 kitchens, 2 bath.
Structure: 2-story wood frame, full front porch, small back porch, cellar room, full-size unfinished attic. 4 fireplaces, slate roof.

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

We were looking for a new personal residence with the potential to add value through cosmetic repairs and landscaping. Additionally it should be located in bicycle/walking-distance to the office and downtown.
This property presented itself at a discount because it hadn't been kept up and showed moderate wear and tear.
The 2-unit setup makes it perfect for house-hacking. Since renovating the 2nd floor, we use it flexibly as an Airbnb and for family and friends.

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

Zillow. Made 2 offers, seller accepted 2nd offer. Negotiated 9K in seller's help and repairs after home-inspection.

How did you finance this deal?

Dan Varda at GuaranteedRate. 5% down, 2.5% interest, 15-year

How did you add value to the deal?

Wrote a personal letter to the seller

What was the outcome?

Seller insisted we visit property and neighborhood in person.

Lessons learned? Challenges?

When you are moving states and switching jobs, it can be incredibly hard to anticipate all the evidence an underwriter will ask for.
Additionally, buying in a new state almost feels like being a first-time home buyer again. Find a realtor that stays on top of you and your lender to make sure the deal goes through without headache.