All Forum Posts by: Nicholas Armstrong

@Mike Wood

Great advice! I looked at the occupied unit yesterday. It is actually more updated than the owners unit. (i.e newer laminate flooring, newer carpet, etc..) But the issue about both units is that both of them were smoked in. ALOT. 

On the day of closing I will be ripping up carpet, scrubbing, painting and scraping ceilings. My wife is pregnant and there isn't a chance in Hades she'd step one foot in there until it gets cleaned up.

@Ken Quagliata

Can I get him to fill out an application before we close?

@Michael Boyer @Chaz Albrecht @Nick L. @Mike Wood

Sorry for the late response!

Thank you all for the input. I'm placing an offer on the duplex this week!

@Jeff B.

I just spoke with realtor. The owners told him there is no current lease agreement.. So does that mean I should present my lease agreement to him when I close? Or just ask that the property be vacant at closing?

Hey guys!! So first off I'm very excited. I've been listening to podcasts for a while and reading posts for a while on BP and now I'm finally working on my first deal! I've gotten approved from a lender and now I'm about to put in some offers. 😆 Here's my situation: The property is a nice two story 3/2 duplex, with separate entrances with two huge nice decks and a garage. It is in a fantastic high end neighborhood just minutes from incredible shopping centers. One unit is occupied by a long term tenant and the previous owner lived in the other unit. The owner of the property unfortunately had a stroke (she is elderly) and now the family is selling the property. The current long term tenant is paying a measly $450/month for the unit. I'm not sure as of now if the tenant was related to the owner or not, but $450/month is extremely low for the area and for that size unit. So here's my question: Can I raise his rent when I purchase the property and move in? (I will be house hacking) On one hand I would feel morally and ethically wrong for kicking him to the curb just because something happened out of his control. But on the other hand, $450/month is way too low. I would just like to know the ethical and legal way of handling this situation before I start throwing out offers. Any help on this would be great! Thanks!

Welcome Randy Roberson to Bigger Pockets! Speaking as a newbie: You'll find all the tools, recourses and people needed to hit the ground running! This place is great! I'm in the Birmingham area as well. Please add me to your list!

Okay seasoned investors, I would like to get your $0.02 worth on two properties I have looked at today. But first, let me start by telling you my plan. Please feel free to critique my plan as well. 

Step 1: Purchase a cheaper (50k-145k) multifamily that needs renovating/updating via a 203(k) loan.

Step 2: Occupy the property (house hack)

Step 3: Refinance or pull a HELOC after 6 months to a year

Step 4: Purchase another property or two from the cash of the refinance/HELOC

 @Brandon Turner 's famous BRRR strategy

Multi-family property # 1:

The above duplex was built in the 70's and that was the last time it was updated. Ugly shaggy orange carpet, outdated wallpaper and kitchen. 2Bd + 2Ba. Both units have a nice patio and back porch, as well as a one car garage and separate entrances. This property is in an awesome neighborhood and in a growing city. Schools are scored at a 9 out of 10 and a block from where this house is a SFH sold for just over 250k. The property is minutes from the interstate, Mall and downtown area. This property is Listed for 138K and similar duplexes in the area are renting for $850-$950/Month

Multi-family Property # 2:

This Fourplex was updated about 7 years ago and needs low to moderate renovating/updating. It was built and 1989 and all four units are 2Bd+2Ba. The neighborhood is in the C- range and the schools are rated at a 6 out of 10. Similar apartments are renting at $500+- /Month. This property is listed at 124k

I put all the information into BP's rental property calculator for both properties at listing price and here are the results: (Keep in mind, I am occupying property)

Multi-family # 1: (Needs updating-great neighborhood-great schools)

-$75 Cashflow/month

Multi-family # 2: (Not so great neighborhood-mediocre schools-further from everything)

+$450 Cashflow/month

So given the information above, which is the better deal?

A great duplex in an awesome neighborhood where I know I can get good long term tenants but have a low negative return. Or,

A not so great fourplex in a not so good neighborhood where I may have issues with tenants but have a decent return.

(This would also be my first deal)

Thoughts?

@Steven Gesis

Do you have any recommendations on how to put together a good team in reference to the 203(k) loan?

Originally posted by @Curt Davis:

How much work does it need?  I believe when you do a 203K loan you are only able to get a max dollar amount for repairs.  Also, is a duplex for $30k truly a B neighborhood?  Seems more like a D area but since your local and can manage it there is nothing wrong with that. 

Good luck

Well, I went and looked at this property today.. The realtor opened the door and HUNDREDS of roaches fell from the ceiling as the door opened. My wife disappeared (Carrying 2 children) and roaches fell onto the realtor who was jumping up and down cursing and hitting himself. And so my REI journey begins...

Needless to say the property was crossed off the list. It was in a historic neighborhood but the house was funky and had foundational issues, mold and obviously a roach infestation. But, one great thing that happened today was I met a realtor who is very familiar with the area, and has several connections with Investors in the area. He showed me two other duplexes in much better shape and next week we will be looking at 2 more (Which I am about to post about)

Sorry for the delayed response.

Thank you all so much for the advice! I looked at several duplexes today, so I need to get my draft written up ASAP. I think I'll pay a professional to write up my lease agreement. Maybe I can find a RE attorney that is also a RE Investor here on BP!