All Forum Posts by: Nate Ginsberg

@Jeremy Holcomb thanks for the info. I'm talking to a couple owners about seller financing but have not approached any hard money lenders yet about 100% financing. There are deals to be had but the high interest rates make me a little nervous about carrying costs during the rehab. I work full time so the length of the rehab is a big unknown. I'm targeting BRRRR deals and BRRRR vacation/Airbnb places mostly.

@Kevin Romines thanks for the idea about the carry back. I’ll look into that. We’re checking into lake houses in NH and ME. The boom in Boston has helped secondary markets like vacation rentals but there are still fixer upper lake houses waiting to be turned over.

Who has used a Redfin agent to buy property? What was your experience like? Would you use them again? Would you use them to sell too?

My wife and I are new investors and love the details in the Redfin listings for research purposes but jury is still out on using them as our agent. Seems like the salary pay structure for Redfin agents should help better align their interests with ours, but are they as good as traditional agents? Without commissions, pay upside is lower so do they have the same drive??

Can’t wait to hear others thoughts/experiences... thanks!

Hey friends!

My wife and I will be house hacking a duplex - our first deal! - and the tenants in the other unit have been there 10 years!! Since the seller bought the house, actually. The seller never raised rents during that period, so the tenants are paying $1150/mo, which is ~$350 below market. According to the seller they have been model tenants.

As my wife and I have debated this, she’s pushing for us to screen and keep the tenants slightly below market (assuming they pass the screening). She would have us keep the rent ~$150 below market initially, to help make sure the tenants stay. I said we should boot them, give them cash for keys if necessary, renovate their unit to open up the floor plan and rent for ~$100 above market rent since. For reference the house is a B property in a B neighborhood in central Mass, the units are side-by-side and each has 3 bed, 2 bath, plus about 800 sqft attic and 800 sqft basement space.

Using her way we potentially have zero vacancy and zero reno costs but are giving away $1200-1800/yr income. My way we probably incur $15k reno costs and 2-3mo vacancy, but make $2400-3000/yr more in rent. Using the current rental rate to estimate vacancy cost, our cash on cash return for the reno should be ~13-16%.

Which would you do?? I appreciate any advice the community can share!!

@Rikako W. I’m going through a similar situation now, and curious to know how your house hack turned out?? We’re closing on our first duplex next week and have tenants paying ~$350 below market rent. Not sure how to handle it yet. What would you do, having been through it yourself?

@Brandt Miller seems like you need a partner. Here’s a scenario:

Team up with your “trusted contractor” - you front the money to buy the deal. He fronts the rehab costs. You offer $400k with 25% down, seller financed at 8%, and your contractor partner does the rehab at risk. You and your partner agree to use sale proceeds first to cover costs, then split all profits after that. With this partnership structure, he has an incentive to finish the job quickly and minimize rehab costs (minimizes his exposure), there is extra upside potential for him in the deal beyond just the contracted work, and you don’t have to front any money for the rehab, just the $100k to buy the deal and the note payments until you cash out refi. If he’s on the fence about partnering you could even sweeten the pot by offering to split a share of the post-refi rents with him, basically a royalty.

Using the numbers from your example, you buy at $400k, with $100k down. Your partner puts in $200k worth of rehab labor and materials. You refi the property for $800k (worst case?) at 75% LTV. You both get all your initial investment/costs covered by the refi payout, then maybe split the rents 50/50. If he's able to do the rehab for $150k, let's say, then you both make an extra $25k on the refi payout. And if he goes over and rehab costs $250k, you split the "loss", and each leave $25k in the deal. Best case your ARV is at the high end and rehab budget is right on target, and you refi at $900k valuation, the. You both make an extra $50k on the refi for the same amount of work.

Just make sure you know your market well before you buy, and that you really trust your partner to execute well. Good luck!

I’m about to close on my first deal - a duplex house hack - and already found a solid second deal, but don’t have 20% to put down as an investment property. Thinking a hard money loan to cover the downpayment and reno costs combined with a commercial investment property mortgage might work though. One problem, how do I find a hard money lender to work with?? Anybody else found themselves in my position when you were starting out? How did you work it out? Thanks in advance!

@Brian Ortins are you managing yourself or have a team working in Leominster for you? I’m just getting started as an investor and property manager and would love to pick your brain. Maybe we can help each other. I am local and good with analysis and hands-on/maintenance. My wife and I have our first deal under contract - an off market duplex walking distance from downtown Leominster - and looking to add 1-2 more properties to our portfolio this year.

@Jay Khoury did you ever find a deal in the area? What was it? We looked in Lowell/Worcester/Clinton too but found the same as you: riskier not being local to those markets, so it didn’t make sense for our first deal.

@Mike Fontaine I’m starting out in leominster area too looking to build a local network. I was thinking of starting a meetup group too so I definitely see value in partnering to get it going. Let’s connect and meet up see how we can help each other.