All Forum Posts by: Matthew Morrow

Investment Info:

Single-family residence fix & flip investment in Coplay.

Purchase price: $105,000
Cash invested: $150,000
Sale price: $230,000

Off Market, Single Family Flip. Customized and sold to client who was able to pick each detail of the project in a crazy real estate market. No competition or advertising. $80K profit, zero personal cash used in deal.

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

Deal from our home town-

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

Direct mail & door knocking

How did you finance this deal?

Cash purchase / rehab cash from prior deals

How did you add value to the deal?

Massive renovation. Added finished SF, Master bedroom / bath. Flooring, Paint, Lighting, etc

What was the outcome?

Sold to Real Estate client who was able to customize the deal from the ground up without competing in the market.

Lessons learned? Challenges?

Seller passed away 1 week before settlement. Dealing with the estate was very educational and eye-opening.

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

Self Purchased as RE Agent

Investment Info:

Single-family residence fix & flip investment in Coplay.

Purchase price: $105,000
Cash invested: $150,000
Sale price: $230,000

Off Market, Single Family Flip. Customized and sold to client who was able to pick each detail of the project in a crazy real estate market. No competition or advertising. $80K profit, zero personal cash used in deal.

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

Mixed used / multi family was the original goal. This fit the bill perfectly

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

Direct marketing to local owners. Negotiated in-person and appeased their situation.
Seller paid ALL closing costs.

How did you finance this deal?

Conventional commercial mortgage. Down Payment sourced from HELOC. Closing Costs all paid by seller. Zero cash our of pocket into the deal

How did you add value to the deal?

Deferred MX considerations, Massive rent appreciation adjustments to market over 24 months. Remodel / repurpose several units to highest & best use.

What was the outcome?

Still holding property. Appraised at nearly 2X original purchase price, Cash-out refi and rolled proceeds into 7 more doors....all of which are similar scenarios to this with large upside / value add.

Lessons learned? Challenges?

Too many to list. Would love to explain via phone or email lol

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

I am an Agent, and work with investors.

Hi all,

Have a great opportunity in my hometown to get into a 5 unit mixed use property. Seller and I have great relationship and he is willing to cover down $$ and closing costs- but also willing to seller finance the whole deal if necessary to avoid the banks profiting.This would leave me out of pocket with little to no cash- Awesome!

Property:

5 units split between two structures on one deed.  3 residential, 2 commercial 

Current Gross Income is 41K, Net is 25K, placing current market value around $250,000, verified with numerous local sources. 

Rents are all $150-200 below market and there is currently 2 un-rented garage bays and a large 500 SF shop which can be turned into a 4th residential unit- bringing the ARV to nearly $350K.

He has a Home equity loan with a $50 K balance, assuming this would be called due on sale. 

My question: 

How should I move forward being my first owner financed deal. He is willing to take around $1000 / mo or interest only payments for 3 years until I can refi out after rents are raised and value goes up. Owner is asking about how Capital gains tax plays into an owner financed deal- which I couldn't answer.

Does he remain on the deed and our sales agreement gets filed at the county? 

Any help is greatly appreciated. This seems like a huge opportunity. 

Cheers,

Matt

Hey Spencer, Another local guy, i like it. Best of luck with everything, Id be glad to meet up and network. The more the merrier.

Matt

@Matt M.

Nice job Matt. We’re very close- I grew up in Northampton and Still live and work in the Lehigh Valley

Keep it up.

@Ali Boone

Aerospace, I love it. Very nice!

Aeronautical Science for me. Nerds flock together!

Degrees are great for many reasons- but they are much more than a selective educational tool set. It’s a reflection on personal commitment and dedication to something bigger- your self investment. This is not to say those without degrees are not qualified or capable of quality business experiences- rather the opposite is quite true. Some of the best business owners I know are free of a formal post-high school education.

My Bachelors degree is in Aeronautical Science. Then again, I’m a full time corporate pilot while investing and operating in real estate as an agent. The degree provided me with a great foundation of business, management, and of course aviation expertise, but never stop learning.

@John Warren

This Makes perfect sense, I definitely seem to be overthinking it when you phrase it like this. Thanks again for the input.

@Dawn Brenengen thanks so much for the reply. You make some great points and see exactly where I’m coming from.

That’s a great idea regarding the disclaimer, I’ll type something up and in the meantime reach out to my broker who also happens to be on the Assn Board.

I was hoping it would be a clear cut answer, thanks again for your insight.

@John Warren

Thanks so much for your input. I agree that the long-term being an agent may potentially hinder my situation- but my secondary question would be how are so many agents also investors?

Your response definitely sparks some considerations. I know several agents that buy and hold strictly for rental purposes while others are in the occasional flip business. There is even one local company who is very successful at “buy your house Cash now no questions asked” that is Also a reputable brokerage for listing their own flips.

Do you think that prefacing my interactions with potential investment based persons- “Although I am an agent I am not acting as such in this capacity? “ or something similar may suffice?

I thought of going to the local Real Estate Assn to get their thoughts but would rather not open a can of worms against myself lol....