All Forum Posts by: Michael Cox

Investment Info:

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

Purchase price: $147,500
Cash invested: $54,000

I bought this small duplex with my business partner.

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

The interesting part of this deal was the cash flow. Right out of the gate after COE, we got it rented and were generating about a 14%
ROI. We spent some money on fixing stairs and getting all the weeds killed off. The tenants have been great and for our first deal it was a true blessing.

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

I found this property through my friend who is an agent that I am now working under as agent myself. We negotiated the price down after appraisal and saved approx. $10k on the deal.

How did you finance this deal?

We financed this deal with a conventional loan. 25% down with about 4.25% interest rate.

How did you add value to the deal?

We added value to this deal by simply getting renters into the units.

What was the outcome?

The outcome as of today, when writing this, is we are in escrow selling the property currently. We will make approx. 110% of our original investment back after COE.

@Bob Floss II

That makes sense. I was trying to think of a way

to have the private lender feel invested in the

property by owning it in a round about way till

he/she is repaid. I was trying to possibly extend

time between purchase and rehab and not feel

the squeeze ofinterest building up.

Thank you though for your advice. Again I am

very new and have much to learn like well

qualified individuals such as your self.

Thanks Scott, 

I appreciate the response. I'm currently just starting out and trying to figure out a way to structure deals when the time comes. I will also look into hard money lending for sure. My main goal at first though is to get friends and family involved on some deals so they can benefit as well. 

Hopefully my first purchase is a SFH which I am able to find out how much the property would be worth after I update it. But I do not have the knowledge on how to estimate the ARV of a duplex or any multifamily properties. I generally understand that they run like a business for value/worth (NOI/cap rate) but I don't know how to comp them like a traditional SFH.

Again, thank you! 

I have a question about private lending? Say I come across a property for 150,000. I only have enough money for 10% down, $15,000. At the same time, I have a good friend who could loan me other 10% for the down. Doing the comps and calculations for updates to the property, it would be worth $300,000 ARV.

In this situation could I have the private lender hold the title/deed while I held the note and re-payed the bank? And then, when the time came to cash out refinance, pay the money owed to the private lender plus interest and have the title/deed transferred to my name?

I'm asking this because if the repairs and upgrades took longer than a year the private lender would feel like they are not getting their money's worth for the investment, but if they held the title/deed at least they would have ownership of the property till the debt is re-payed.

Is this something that can work?

Thank you all for your comments in advance.

I have a question about private lending? Say I come across a property for 150,000. I only have enough money for 10% down, $15,000. At the same time, I have a good friend who could loan me other 10% for the down. Doing the comps and calculations for updates to the property, it would be worth $300,000 ARV.

In this situation could I have the private lender hold the title/deed while I held the note and re-payed the bank? And then, when the time came to cash out refinance, pay the money owed to the private lender plus interest and have the title/deed transferred to my name?

I'm asking this because if the repairs and upgrades took longer than a year the private lender would feel like they are not getting their money's worth for the investment, but if they held the title/deed at least they would have ownership of the property till the debt is re-payed.

Is this something that can work?

Thank you all for your comments in advance.

@Kyle J. @Eric Veronica

Thank you for the response! All of it is really good advice. I will be looking in to it!

@Kaiser J.

Thank you for the advice! I will look into it.

I am wondering if you can take a loan out against a home that you fully own that is not your primary residence? If yes, what would be the steps to start the process?