All Forum Posts by: Patrick Terrebonne

Welcome Latisha, nice to see someone local. 

Hello all, I just registered and will be staying less than 30 minutes away at my new short term rental (currently under contract). This event gave me the push to move into the short term rental market. I grew up an hour and a half away from N.O. and love going to the city anyway. 

On March 22 of this year I made my first rental purchase and am currently sitting on 14 properties and 20 doors in the last 4 months. Soon to be on property 15 and door 21 with this short term rental. My life has changed thanks to this community and I cant wait to meet and grow with all of you. Thank you bigger pockets!

Thank you very much. I will be sharing more soon.

Investment Info:

Single-family residence buy & hold investment in Brookhaven.

Purchase price: $50,000
Cash invested: $7,500

Single family 3/2

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

I heard so many success stories on Real Estate Rookie that I figured I could do it too.

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

I called a Real Estate agent and basically just said I want to own rental property. The agent said she had a new property that morning and had not listed it yet and said she thinks it would be perfect for what I wanted. The owners wanted 65k so I had the RE Agent show me the property. I did a basic inspection of the place and offered 50k. It was a pocket listing and was not yet on the market and I was the first person to view the house. I offered them a quick sale and they accepted.

How did you finance this deal?

Commercial Financing through a local bank.

How did you add value to the deal?

There were multiple children who inherited the property from their parents and by purchasing, I offered a way out for all parties to have their hands clean.

What was the outcome?

They wanted 65k and they accepted my counter of 50k. It is rented at 700/month and after PM fees, taxes, insurance, mortgage etc., my cash flow is 164 a month and my COCROI is 21.95%. Much better than the Wall Street average.

Lessons learned? Challenges?

I read that sharing your successes and failures brings on more success. So with that in mind, Ive decided to share away. Every deal does not have to be a Home run, Slam Dunk, touchdown or whatever analogy you want to use. A positive Cash Flow and ROI is still a good thing. This also gives me more control over my investments vs the Stock Market.

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

I was fortunate enough that the first RE Agent I called was too busy for me. The second one I called is a second generation agent with 30 plus years in a family agency that has been around for more than 50 Years. My RE Agent is also a property investor and has a property management company and is well connected with everyone from bankers to attorneys and home inspectors in the area.

I see two blocky white numbers floating in a space with the 27 on top of the 48.

27

48

And almost like watching a Pixar film, I see a line appear below the 48 and then a 5 show up right under the line. I then see a tiny 1 appear on top of the 2 and then I see the a 7 appear along side the 5.

Like its self animated.

@John Teachout the cashflow is what the property makes now. If I purchase the property and I am taking in 1800, I will be negative 200 paying 2000 per month minimum.

Although I have several single family homes, this is my first commercial venture and I will be purchasing a small strip mall. The owner is in teir 70s and will do owner financing rather than a straight sale.

Sale price 250k

10 percent down

Minimum 2000 per month but can pay more

5% interest

Remaining balance due in 5 years

Cashflow, after all expenses, 1800 a month

My gut says jump on it but my brain says, I will have negative cash flow.

My plan is to raise the rent on the 5 businesses, within the mall, at least once in the next 5 years. Put some additional funds into it and in 5 years time, refinance. Then get traditional financing and take the equity to pay off the remaining balance.

I like the idea of owner financing and not touching my revolving corporate credit line. I want to have floating credit to purchase more properties as they become available.

The apraisal and the numbers work for me, but being cashflow negative for 5 years is a little off putting. Am I just over thinking? Thanks for reading.

The biggest issue is living in a nice area and then a pedophile moves in across the street. Same thing can happen no matter where your rentals are. Pedophiles come from all different financial and social classes.