All Forum Posts by: Michael Hill

It is a homeopath property. I’ve been told the house has a mold problem and the home has gone under contract 3x in the last year and a half but they have fell through. Sounds like Fannie Mae made improvements to the home but after their due diligence did not want to put any more money into the home. But I will have to take that into consideration on cost of removing mold. I don’t want to over leverage and be stuck with a mold filled home. If anyone has dealt with mold feel free to share your experience!

Hey Bigger Pockets Family. I'm a local Realtor since 2005.  Over the last year I've learned A TON about seller Financing. I'd love to share knowledge with the community AND learn and collaborate with you all!  I look forward to connecting, Let me know if you have any questions or want to share anything, deals, knowledge, or simply want to connect.  I am doing a Zoom meeting to talk about The Power Of Seller Financing in February if you're interested. 

Quote from @Michael Hill:

Quote from @Eric Mensah:

Hi Nana Sefa,

- If you are doing a house hack in quad, NEVER NEVER disclose to your tenants you are the Landlord. 

When you do your walk through, don't the current tenants (if inherited) get to see you, and meet/greet ?   if they then notice that you're moving in (into one of the units) wouldn't they assume you're the landlord and living there now?

How could you maintain some anonymity in this scenario?

I'm looking into getting a quad for house hacking and I do not want the tenants to know that I'm also the landlord.  If I don't have inherited tenants, the property manager will handle all of this, so I would be insulated in that regard - but for inherited tenants - I'm not sure of a solution to maintain some buffer. 

Michael,
- First when I did the walk through with buyer/seller agent, only one tenant was at home. The rest were always working. The agent told the tenant we are here to do inspection of the property. I did not introduce myself. 

- When I bought the quad I told the seller not to include my name in the letter to the tenants making them aware the property has a new owner. So even though the tenants knew property has been sold and has a new owner they did not know who it was. 

- I set up an LLC to self manage the property since I was living in one unit. When I interacted with the tenants I introduced myself as the new property manager which is true because I am the one managing the property. 

- I have a business phone that they would call through if they had issues. They pay rent online through Rentredi.  As Simple As that. I hope this helps. 

Quote from @Michael Hill:

Quote from @Justin Goodin:

I spent $16,444 renovating this 3-bedroom apartment at one of my properties.

Here's the breakdown:

- Kitchen faucet: $76
- Thermostat: $30
- Bathroom hardware: $34
- Toilet: $94
- SS stove: $250
- SS microwave: $150
- SS fridge: $781
- SS dishwasher: $349
- 6 MIL LVP flooring: $2,840
- 4 black matte LED ceiling fans: $204
- Bathroom faucet: $77
- Bathroom vanity: $189
- Bathroom mirror: $60
- Lighting fixtures: $150
- White shaker cabinets: $2,142
- Black matte cabinet handles: $36
- Blinds: $88
- Black matte hinges: $51
- Black matte door knobs: $108
- Blanco single bowl sink: $100
- Blanco sink rack: $25
- Quartz countertop & install: $1,100
- Smart lock: $40
- Paint & materials: $565
- Random materials/parts: $259
- Labor: $6,646

Renovation time: 30 days

Previous rent: $575
Signed leased: $1,610

Long term hold strategy.

I'm choosing to renovate every unit to a premium level finish with high quality materials. This should allow me to have less maintenance issues in the long run.

Let me know what questions you have about this interior renovation.

 This is really good stuff.  I appreciate you sharing. 

What's the value add of these improvements?

Also if you don't mind sharing - what is your projected capex for HVAC, water heater, roof, windows, etc ?

 Hey! 

The value add is the rent bump that I received. I didn’t replace the HVAC system in this unit. 

I spent $16,444 renovating this 3-bedroom apartment at one of my properties.

Here's the breakdown:

- Kitchen faucet: $76
- Thermostat: $30
- Bathroom hardware: $34
- Toilet: $94
- SS stove: $250
- SS microwave: $150
- SS fridge: $781
- SS dishwasher: $349
- 6 MIL LVP flooring: $2,840
- 4 black matte LED ceiling fans: $204
- Bathroom faucet: $77
- Bathroom vanity: $189
- Bathroom mirror: $60
- Lighting fixtures: $150
- White shaker cabinets: $2,142
- Black matte cabinet handles: $36
- Blinds: $88
- Black matte hinges: $51
- Black matte door knobs: $108
- Blanco single bowl sink: $100
- Blanco sink rack: $25
- Quartz countertop & install: $1,100
- Smart lock: $40
- Paint & materials: $565
- Random materials/parts: $259
- Labor: $6,646

Renovation time: 30 days

Previous rent: $575
Signed leased: $1,610

Long term hold strategy.

I'm choosing to renovate every unit to a premium level finish with high quality materials. This should allow me to have less maintenance issues in the long run.

Let me know what questions you have about this interior renovation.

Hey James ! My name is Jacob with Lendbright and would love to answer any questions for you that you may have in the analysis of your project and the inspection process . When is a good time for us to connect and discuss ?

Hi Nana Sefa,

- If you are doing a house hack in quad, NEVER NEVER disclose to your tenants you are the Landlord. 

As an update on this strategy CMT 1 year which is the index the AIO loan product uses was up to 5.50% in early October 2023. Recently its down to 4.82%, so if we keep in mind our margin or the fixed portion the lenders add on top of the index to come up with your daily rate calculation is going to be as follows:

4.82% + 3.75% (example margin for AIO) = 8.57% so we'll round it up to the nearest .125% which should be 8.50% interest only.

Given that prime is 8.50% already and there is a margin on top of Prime for most HELOC's out there from .25-3.00% your traditional HELOC would be much higher rate than your comparable AIO loan comparatively.

So just some food for thought. Both of these products, HELOC's Vs AIO loan are first position mortgages and typically start out with interest only but its important to note that HELOC's are based on prime predominantly while AIO loans are usually based off CMT 1 year Index.

If there are any questions on how this applies to your scenario or the risk assessment for your portfolio feel free to reach out and lets discuss.

@Matthew Kwan 

@Carlos Valencia

I am looking to buy a mobile home park and ran into an interesting situation. The disclosure of the property released 1 year rent roll and income statement but the expenses seem a bit low. I asked for 2 more years of income statement or rent roll so that I can finalize my analysis but seller is giving me the run around. I am trying to figure out if my request is unreasonable prior to giving an LOI or whether this could be a fishy sale that I should drop. Thank you very much in advance

Some stats on why I think expenses are a red flag

25 % expenses of the gross income

3% on Repairs & Maintenance of the gross income

The repairs and maintenance seem really low since the park owns more than 50% of the homes