All Forum Posts by: Nathan McBride

Thanks.  I can't say that I have ever gotten the "you're crazy" or "you're wasting your time" responses from folks.  I mostly get deer in headlights or glazed over expressions from folks that can't comprehend all that goes into this or who find it exceedingly boring.  

I think that for me REI is the most rational and understandable forms of investing, and it is about as interesting as it gets!

Best of luck to you.  Be patient and stick to your criteria - remember that buying no deal is much better than buying a bad one.

Are there any investors in Louisiana (specifically Baton Rouge) with experience in condo conversions?  I have a potential opportunity to purchase a property that consists of a few buildings.  One of the buildings would be prime for condo conversion, if it is not too difficult to do here.  Just an idea that I was hoping to discuss with someone with more experience.

-Nathan

Yesterday, I just closed on our second multifamily deal.  I can honestly say that almost every part of this deal was influenced in some way by what I have learned on this forum, in the webinars and, especially, on the Bigger Pockets Podcast.

To begin with, this deal was not on the market.  I found it by using one of @Brandon Turner's methods recommended in podcasts and webinars:  I saw a for rent sign and simply called the number, asking if they would want to sell the property.

I analyzed the property using methods discussed on Bigger Pockets, using a lot of the criteria discussed on this site to push myself to make this as good of a deal as possible, while working to find a win-win for the seller and myself.

Throughout the negotiations, I used techniques directly taken from lessons in the Chris Voss podcast (in fact, I had this podcast playing in my car for the days leading up to the meeting I had with the seller as part of my preparations).  I've listened to that podcast at least 3 times; I highly recommend it.  It is podcast #260.

I then got a second opportunity to try out my negotiation skills when we renegotiated after inspection  and got a significant amount taken off the purchase price plus a huge amount of credits at closing.

And then, to top it all off, I closed the deal using none ($0) of my own money.  Well, I did pay for the inspection and the deposit - which I reimbursed myself for  out of the first month's of rent checks : ).

Now, I am working my way through The Book on Managing Rental Properties to ensure I am doing all that I can to maximize profits and minimize risk.

Basically, the reason for this post is a "thank you" to this forum and the folks at Bigger Pockets for the wealth of information provided here. 

-Nathan

P.S.  Our first deal was three units, and this one is six. Can you say STACK Method? Here's to hoping this trajectory continues!

I'm waiting on a call back from a title company on this issue, but I figured I'd throw the question out here, as well.

I am looking at a few lots in Baton Rouge that were purchased in a Civic Source auction (all three were adjudicated).

My strategy is to drop modular homes on the lots and rent them out (trying to grab low income housing credits if possible in the process).  Additionally, I know of an opportunity to make a little extra $$$ in providing a perpetual servitude (10' x 10' with driveway access) on one of the lots to a government entity that is doing a type of surveying in the area.  

This is very much still in the idea phase; I do not have anything under contract at the moment.  I am just looking into feasibility.

Does anyone know if the adjudicated title would prevent me from working out a perpetual servitude deal like this?  Supposedly the title is clean, but with Civic Source themselves seeming to acknowledge there are risks, how "clean" is the title really?

@John Underwood  The lease doesn't mention pest control (lesson learned there), so I guess I'm on the hook for the treatment.  And yes, they have a ferret, which could be the culprit.

I like @Will Gaston's idea of doing the treatment with the understanding that the tenants pay for any issues going forward.

Thanks for the advice!

I have a tenant in an upstairs unit that notified me that they have fleas in their apartment.  This is a two-story standalone building consisting of two efficiency apartments, one on top of the other.

The tenant below them does not have fleas, and neither do the tenants in the front house.

I bug bombed the apartment in question, and the tenant claims to have bombed it again.  But they said they still have fleas.

At this point, I feel like it is fairly safe to say that they brought the fleas in with them or at least their cleaning habits (or lack thereof) have contributed to the problem.

Anyway, my question is who is ultimately responsible in this case?  I've been trying to treat the place, but if they don't clean up after themselves, there's only so much I can do.  Fleas love hiding in piles of dirty laundry.

Treatment would be simple if they and their stuff were out of the apartment.

To prevent this problem in the future, I will be putting pest control on the tenant in my leases (but continuing to spray the outside).

Any advice would be greatly appreciated.

-Nathan

@Joseph Wang, it was the fact that the property consists of two separate structures, with the auxiliary structure containing two units. That’s what made it a non-conforming property. 

Usually, a mother in law or garage apartment won’t necessarily make a property non-conforming. In my case it was the two units that did it. 

Typically, anything that’s four units or less would be conforming and qualify for a 30-year note. For example, I took a prospective deal to a bank that was a triplex with a garage apartment (4 units total) and was told it qualified for a 30-year note. 

Hope that helps!

 Joseph,

Thanks!  I was very fortunate that my first deal went somewhat smoothly and worked out well (so far anyway).  It wasn't a home run, but it's quite profitable and I have learned a ton from the experience.

I found it through an MLS portal (MLS Box), and set up an appointment to view it the next day. I was fortunate to be the first person to look at the property (had just been listed), and after looking it over made a verbal offer to the listing agent, indicating that I would represent myself (double the commission for her). I followed up with a written offer within an hour or so.

The property was fully rented at the time but well below market, and there was quite a bit of deferred maintenance.  I was able to see the potential, though, and I knew from the realtor that the sellers were motivated (they were siblings who inherited the place and did not know how to manage properties - they had no leases in place, the taxes hadn't been paid in at least a year, and the property wasn't even insured!).

I ended up having to go with a commercial loan for the purchase because of the detached, two-unit building behind the house.  This meant a 20-year amortization, unfortunately.  The property still cashflowed from day one, however, so we went ahead with the deal.  

I'm actually quite glad that I was "forced" to go the commercial route for this one.  The experience of finding the loan and seeing how commercial deals are done was eye-opening, and I developed a banking relationship that will almost certainly be helpful down the road.

I definitely want to use 30-year notes for everything I can in the future for cashflow, but now I have seen firsthand that there are always financing options when conventional won't work if the deal is there. I'm hoping that a BRRRR is in my near future, and creative financing could come in handy during the construction phase.

Because all units were rented out with tenants wanting to stay, I put minimal money upfront in repairs/renovations.  I prioritized all of the repairs that needed to happen, knocked out the critical ones within the first month or so (doing the work myself to save $$$), and have been maxing out my repair budget each month to get everything else where it should be.  This month is exterior paint : )

I'd be happy to answer more questions if you have them. How has your venture into REI been going?

-Nathan

That's great that you're taking the time to build up a solid foundation of knowledge before jumping in.  I wish you luck in your search for your first deal.  

I may take you up on your offer.  In my mind, a second set of eyes looking over my work is always helpful.  I'm also always interested to hear what other folks think about the local market (acceptable returns, price, rents, etc.).

Thanks,

Nathan

Hello,

My name is Nathan McBride.  I've been lurking on BiggerPockets for about a year now, and we purchased our first property in November 2017 and are actively working on the next one.  I figured it was about time I get around to introducing myself to the forum and start actually participating in conversations.

My wife and I have lived in Baton Rouge for five years now, and we really like it and see ourselves here for the long haul.  

I view real estate investing as a potential career alternative and as a way to literally invest in the city and community that I call home.

Our first deal was a 3/2 house with a detached "apartment building" that houses two studio apartments.  It's a strange piece of property but profitable.