All Forum Posts by: Moises R Cosme

Investment Info:

Small multi-family (2-4 units) fix & flip investment.

Purchase price: $60,000
Cash invested: $7,400
Sale price: $160,000

This turned out to work out for us, even though our intention was to rehab it and hold it as a long term rental. We sold for a good price and the buyer got solid value because Gardner is an appreciating market, the new buyer's intention is to fix it and rent it (we resolved all of the issues with the City of Gardner prior to the sale) so it will be a great investment for him as well.

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

Gardner is my home market, the property had been vacant for years & previous short sale attempts had failed. We were able to connect with the owner and he was willing to work us on a sale. We referred the seller to LAER Realty Group, Al Sciola runs an excellent team there, they brokered the sale & everything worked out.

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

Called through non owner occupiers, the Seller had tried to sell the property before but failed to; we agreed on a price, I then referred him to an excellent short sale broker who negotiated the sale.

How did you finance this deal?

Hard money loan.

How did you add value to the deal?

We bought the property at the right time, we also invested a lot of time in negotiating with the lender on their appraisal results; the initial appraisal came in at $95,000, we pulled together a detailed report and were able to get them to accept our $60,000 offer. We also cleaned the house out ourselves. We did this to save money on the renovation budget, but in the end it was a value add to the Buyer (took 5 days to clean out & 3 dumpsters).

What was the outcome?

We made a reasonable return on our money.

Lessons learned? Challenges?

Vacant properties require multiple approvals from the town before proceeding with any type of renovation.

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

Al Sciola, of LAER Realty Group

Investment Info:

Small multi-family (2-4 units) fix & flip investment.

Purchase price: $60,000
Cash invested: $7,400
Sale price: $160,000

This turned out to work out for us, even though our intention was to rehab it and hold it as a long term rental. The City of Gardner has specific standards regarding vacant multi family properties that made it tough to achiever our objective. We sold for a good price and the buyer got solid value because Gardner is an appreciating market, the new buyer's intention is to fix it and rent it (we resolved all of the issues with the City of Gardner prior to the sale) so it will be a great investment for him as well.

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

Gardner is my home market, the property had been vacant for years & previous short sale attempts had failed. We were able to connect with the owner and he was willing to work us on a sale. We referred the seller to LAER Realty Group, Al Sciola runs an excellent team there, they brokered the sale & everything worked out.

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

Called through non owner occupiers, the Seller had tried to sell the property before but failed to; we agreed on a price, I then referred him to an excellent short sale broker who negotiated the sale.

How did you finance this deal?

Hard money loan.

How did you add value to the deal?

We bought the property at the right time, we also invested a lot of time in negotiating with the lender on their appraisal results; the initial appraisal came in at $95,000, we pulled together a detailed report and were able to get them to accept our $60,000 offer. We also cleaned the house out ourselves. We did this to save money on the renovation budget, but in the end it was a value add to the Buyer (took 5 days to clean out & 3 dumpsters).

What was the outcome?

We made a reasonable return on our money.

Lessons learned? Challenges?

Vacant properties require multiple approvals from the town before proceeding with any type of renovation.

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

Al Sciola, of LAER Realty Group

@Deisy P. How much equity do you have? What is your net profit on your rentals per month? We all go through challenges (I have the privilege of a man) but, I believe that the numbers should always guide us when times get rough.

Sexism is awful.

@Marcus Auerbach thanks for citing the graph.

@Taylor Wrice-Brooks if that's the case there is no real macro change since rents will pull back in one market and increase in others. We have seen this in our markets, property value & rents have risen dramatically in small cities in our area and pulled back a bit in the big metros.

I agree, it does not seem that interest rates will increase in the very near term (12 - 18 mos), but that only creates a larger problem down the road since you have more buyers paying the higher prices with monthly payments based on the lower interest rate. All of those buyers would have negative equity if interest rates flex up and prices pull back as a result. The more buyers you have in that situation, the bigger the problem when those properties turn over.

Obviously, this is all opinion - all of us just need to transact given the set of circumstances that exist in our markets at the time.

@Jerryll Noorden you may feel that way because CT is the 'list', the amount of distressed inventory in Hartford and the sorrounding area is mind boggling. Anytime we do any marketing in CT our response & success rates are 4 times higher than MA.

Attributing the success you have had with digital marketing and subsequently asserting that lists do not work, is a classic example of misunderstanding 'correlation' and 'causation'.

@Marcus Auerbach what data went into that graph? What does 'home affordability' mean in the context of that graph?

@Marcus Auerbach banks do not like holding residential real estate, it is a nightmare for them. You are spot on!!!

@Marcus Auerbach great points!!! How much debt does the average millenial carry? How much are they making? How are they able to service their debt loads?

Lending works when people are not overly indebted; general trends are drifting toward over indebtedness. Demand only works if the people looking to buy can get financing. The majority of homebuyers finance their purchase, that financing is not disconnected from their broader financial picture and that broader picture is dependent on externalities like interest rates.

@Javier Rosales with respect, you are wrong. What was the price of a new car in 2000? 2010? Compare that to 2020. What was the cost of a gallon of milk in 2000? 2010? Compare that to 2020. There is no shortage of milk & there is certainly no shortage of cheese.