All Forum Posts by: Morgan Ross

Investment Info:

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

Purchase price: $365,000
Sale price: $365,000

4-plex
x3- 2bed/1 bath
x1- 1 bed/1bath

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

Passive income

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

Realtor.com. We offered 5k under asking. Owner came back asking for 5k over asking due to multiple higher offers but wanted to give us the chance to come up because he said he like us 😊. We went for it because even at 5k over asking, we are still cash flowing 2k positive a month.

How did you finance this deal?

Conventional loan with 25% down payment. Used the profit from out live-in flip for the down payment

How did you add value to the deal?

So far, we haven’t. 2 leases are up soon and we do not plan on resigning for various reasons so we plan to update both units and increase rent.

Lessons learned? Challenges?

Passive income is amazing. Receiving our first checks for “doing nothing” was such a crazy experience that just makes us even more eager to keep pushing and buying more properties.

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

Real Estate Agent - Joe Dino: Keller Williams, Shore Property Group. Joe has dabbled in REI himself which made it so easy to work with him because he had full comprehension of our goals. He has good insight and advice for handling more difficult tenants

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $199,000
Cash invested: $40,000
Sale price: $353,000

Live-in flip with FHA 203k loan

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

We saw this as our way "in" to REI. We were 24 at the time with not a lot of money for down payment. Although we would have loved a cash positive multifamily right off the bat, it just wasn't feasible for our situation. So we made it work!

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

Hours upon hours of scanning all the usual sites. The house was being sold “as is”. We put in an offer 15k below asking and settled on 2k below asking. For us, this was fine. We knew the worth of the property in our area which was fair.

How did you finance this deal?

FHA 203k!

How did you add value to the deal?

Renovated almost the entire house:
- added central HVAC
- new roof
- new windows
- new engineered hardwood throughout
- removed walls for more open concept layout
- entirely new kitchen with more functional layout
- waterproofed and treated cedar siding,
- renovated both bathrooms
- new hot water heater
- new entry doors

What was the outcome?

Blood, sweat, tears, and $105,000 in profit!

Lessons learned? Challenges?

While it theoretically makes sense, live-in flips are HARD. At least to the extent that we renovated. It was very challenging going with out a kitchen for almost 5 weeks. Keep in mind we also worked full time. We would go to work, come home, work on the house until 9,10,11pm and repeat. Living in your work space is not ideal. I say I wouldn’t do it again, but if an opportunity like this one came up again, we would jump on it.

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

Real Estate Agent - Joe Dino: Keller Williams, Shore Property Group. Joe has dabbled in REI himself which made it so easy to work with him because he had full comprehension of our goals.

Hello all, 

My wife and I have been in the construction industry for almost 10 years and about 2 years ago began our journey into real estate with our first purchase, a live-in flip that took us about a year. Now on the other side of that we are 2 days (hopefully) away from closing on our first multi family property, a 4-Plex in southern New Jersey. Becoming a landlord for the first time of course we are excited and have a ton of questions but the debate between having an LLC vs S-Corp I can not seem to find an answer to.

Caveat to all of this is we already have an LLC, a legal business name and a tax ID number for our company. I would love to be able to keep it all under one umbrella and am not opposed to changing the business name to something more vague and less construction specific (Also to take advantage of S corp tax benefits). We are ultimately going to be pushing away from the construction end of things anyway.

So what I am really asking is has any one had any similar experiences? Biggest concern being where rent checks get written out to and wanting to stay as professional as possible with our tenants. Any advice or experience on this topic would be greatly appreciated! 

Thanks!
   

Thank you all for the welcomes and well wishes! I should have done this months ago! 

@Eric G. We are very well acquainted with Ship Bottom. We would love to talk! We have seen and done a lot in a short amount of time owning our business, but even if it was something we couldn’t handle, we could most definitely steer you in the right direction with contractors. After Super Storm Sandy, we have had a lot of scamming contractors around here so I would just do my due diligence in selecting one, which we would be more than happy to help you out with! 

Hello everyone!

I’ve been a BP member for a few months and am finally listening to a quick tip! 

I’m Morgan Ross, currently residing in Manahawkin, NJ. I am finishing up my graduate degree in speech pathology and found Bigger Pockets when searching for ways to invest money. (These college loans aren’t going to pay themselves!)

I love what I am studying but I don't want my career to define me or my finicial status. So my boyfriend, Max, and I have decided to dive into REI while we have the time, engergy, and flexibility.

Because of my lovely college loans, I don't have much money to invest or the ability to get a mortgage myself. BUT, I am not going to let that stop me. Max and I have owned a small construction business (Bathroom & Kitchen Renos, Flooring, Trim work, decks, pavers, ect.) and with Max's patience to teach me, I have developed quite a skill set. I also see myself as a go-getter. I do a search in my area at least once a day to see if any new and exciting deals come up. I try to keep myself in the mindset so I don't lose sight of what my life could be through REI.

While we many not have bought or sold any deals, we are working on a project that is a little unconventional. We are building a tiny house! Why? We were gifted a trailer and believe this could be our way in. Personally, I could never live in something that small but, there are people who do and would. We ran the numbers and found that our ROI would be just what we need to kickstart us into owning property and making our dreams reality.

As of right now, we are not to sure which branch of real estate we would like to go into. Because of our business, flipping seems like a way to go for us however, we are pretty open to all sorts of investing. The best thing for use right now would most likely be to house-hack. (If you know anyone trying to sell a multiplex in the southern NJ area give me a shout!)

Hope everyone has a great day and Happy Investing! 

Hello BP world,

The big picture of real estate investing is brand new to us. However, the idea of flipping is not. We have come to the conclusion that flipping is going to be the best way for us to join the REI community. We are lucky enough to have the knowledge and skill set of construction, inspection, and cost estimation. BUT we know when to admit we don't know something and need help. So that being said, we are wondering if there are different types of strategies/tips/loopholes that would reduce the amount of taxes that would need to be paid after the sale of a flip. Are we out of luck unless we do a 1031? Would starting a corporation be helpful?

Thoughts and feedback would be greatly appreciated! Thanks!