All Forum Posts by: Nathaniel Cherubini

Investment Info:

Single-family residence buy & hold investment in Murrieta.

Purchase price: $440,000
Sale price: $675,000

Purchased with 5/5 ARM, no money down and walked away from closing with $4,800 in pocket. Refinance into 30yr VA and got $38,000 cash out for use in Florida investments. Refinance via IRRRL into 2.5% interest rate and put $8k in pocket. Sold via MLS when moving to DC on military orders. Paid off HELOC and put $100k in pocket.

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

Saw the opportunity in a potential high growth market. Hoped for appreciation to launch future investments. Backup plan was to retain as rental while paying down note and long play on appreciation, hedging against inflation.

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

MLS. Saw a $40k price cut and made offer next day for full asking price and asked for $10k towards closing costs.

How did you finance this deal?

Navy Federal 5/5 ARM at 4% zero down payment, made $4,800 at closing.

How did you add value to the deal?

Market and economy added value while I maintained the residence to high standards. Minor cosmetic and efficiency upgrades over four and a half years.

What was the outcome?

Sold for a significant profit, paid off mortgage, HELOC, and solar loan, made over $100k.

Lessons learned? Challenges?

Understanding lending and products available can help generate tax-free cash, repeatedly. I used a 5/5 ARM, VA 30yr fixed, IRRRL into 2.5%, and HELOC. All told, I was able to gain over $50k from different closings/refinances/HELOCs, and still made over $100k at selling...all tax free (primary residence). I got deep into loan types and rules and became a lender =)

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

I worked with Carmen Cipolone of the Simple Loan Group and joined his team as a mortgage loan originator. Carmen took amazing care of me and has been my go-to lender in my Florida investments as well and he now mentors me in the lending industry. Justin Noe of Justin Noe real estate and Twin Pillars Investments has been a trusted advisor and business partner throughout this journey as well.

I couldn't agree more @Elijah Vo. We are knocking down (small) deals in Florida consistently and growing our portfolio. People always ask me where and how I keep finding deals in this white-hot market. The answer is simple, I put myself out there and talk to people and communicate my intentions. I also have a team of solid people I work with and they are the same way. Any given day we may stumble upon someone trying to sell a home or multiple homes and be willing to offer seller financing...it happens if you are constantly out there engaging with people in the market and consistently showing up.

If you do not want to house hack or live-in flip, you can try STR arbitrage. This is where you rent apartments/units then sublet them as short term rentals to generate cash flow. It is imperative that you ALWAYS disclose this model with the unit owner and obtain permission to conduct this type of business (that is the hard part but be creative, cut them in on the profits). I have not personally done this but have heard from several people that made their beginning successes doing STR arbitrage. At the end of the day, "...whether you think you can or think you can't, you're right." ~ Henry Ford

War zone type neighborhoods. If I wouldn't feel safe in my property then I wouldn't charge another human being to live there. I will invest in the edges though hoping to bring improvements into the area.

RE is about the long game. Have a plan and have a backup plan (converting to long-term rental?)...I know folks who bought at the "top" of the market in 2005 and were under water for years. They held on making modest cash flow for years and have recently been able to reposition their capital due to the strong gains of the past few years. If they did not buy in 2005 (which looked like a bad move for a decade), they would have missed out on the modest cash flow plus experience and debt pay down for the past 17 years. They also would not have been in the position to sell or refinance recently to take a windfall and reinvest into stronger ROE properties now. Times are uncertain and certainly changing but the fundamentals of RE remain constant and sitting on the side line is a losing strategy. Do your homework (looks like you surely have), have a plan, and stay in the game!

Welcome to BP! @Lynda Nadal, @Justin Noe and I invest in Hernando County and are both active duty military stationed out of state (CA and CO). Please feel free to reach out if you ever have questions about dealing with military, VA loans, or anything else! Sounds like you are already crushing it this year =)\

Regards,

-Nate

Hey Eric, I am curious, how did these numbers hold up since getting into this place? Last we spoke you were maximizing every ounce of income potential from this place...did the numbers in the calculators line up at all? When you are back from wherever you went we should link up on a call.

-Nate

Just some additional info for the thread: My rental property mortgage was under BB&T bank, then New Rez Financial took the note and their transaction name is Shell Point Financial which also services loans, not just debt collection. Hope this takes a little edge off of the situation while you wait for the details to come back.

@Michael Goldsmith I totally agree with the hesitation to purchase software or packages. I am traveling rn but once back home I will let you know the .gov resources I use for my analysis on top of some extensive Googling. Nothing sexy, quick, or easy, it takes work to learn a market from a distance, but there are resources out there of value.

Regards,

@Joe Splitrock Yeah I totally saw the post topic after I posted...the content of the post had nothing to do with homeless people and the comment made ridiculing him was very unnecessary which is all I was pointing out. I never weigh in on differences as that is just healthy dialogue when done with good intention...the post I am referring to was not debate or differing opinion, it was just trolling in my opinion.