All Forum Posts by: Peyton Holtz

Hey BP! Any have any experience north of Pittsburg, PA: Cranberry, Warrendale, Wexford. I am looking for an investor savy agent and a property manager in the area?

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $695,000
Cash invested: $24,000

Analysis Report: https://www.biggerpockets.com/...

Contributors:
Shelby Osborne (RE Mentor) |  Mary Shawcross (Local Market Advice)

Three family property. 

2x 900 sqft 2/1 apartments | 1x 1700 sqft 2/2 apartment with rooftop deck | 1x additional 550 sqft studio apartment | detached two story garage (500 sqft dry storage space with external access over 2-car garage). 

COMPLETELY renovated in 2006-2008 by owner/occupant as his retirement home who had to sell and move in 2020 due to unforeseen circumstance.

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

A mentor, Shelby Osborne, reminded that the power of using my zero-down, zero-fee VA entitlement at current low interest rates presented massive wealth building potential. I was looking for a generally turn-key, multi-family property with room to increase rents. My goal was simply to break even in terms of cash-flow, to facilitate a profitable sale in 10 years time (recoup equity).

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

On MLS - had alerts set up that matched my criteria. Toured this the 2nd day on market. UC on third day on market. Offered asking price as the numbers worked, but asked for seller to pay $11K toward closing costs. Owner accepted contingent on allowing some extra closing time for him to take care of special family circumstances.

How did you finance this deal?

30Yr Fixed VA loan w/ Flagstar Bank (contact Jesse Kenner in Providence, RI). $695K at 3.125%. No funding fee. With credits at closing, I walked away from the closing +9800 in cash.

How did you add value to the deal?

The previous owner created a studio apartment (4th potential dwelling unit) on the first floor as part of the 2006 renovation/addition. It was not permitted to be an ADU, so he left it partially unfinished (simply, no climate control) and used it as an office. I found out that as long as short term rentals (STR) were less than 30 days in our town, I could use it as an STR (AirBnB). So, I designed and renovated it into an upscale studio AirBnB that can accommodate four guests. airbnb.com/h/suite43br...

What was the outcome?

While self managing, after 15% reserves, this cash-flows $1100/mo in the low AirBnB season (98% CoC ROI). When I move out, if I use a manager, it will cash flow $250/mo or 21% CoC ROI.

Lessons learned? Challenges?

LESSON: Know your criteria/#s and build your funnel. I analyzed/looked at every MFH that hit the MLS for two months. I was lucky that this owner bought and renovated to make it his own home. He likely invested more than $1M, but the property only appraised at $705K. So, in a really expensive market that is hard to cash flow, I found a turn-key home with room to increase rents by $300/apt.

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

Sandy Warner @ Warner Realty Group (Broker, Property Manager, and RE Attorney!) in Newport

Paula Martel @ TopSail Realty in Bristol (Broker)

Jesse Kenner @ Flagstar Bank (Lender)

Rob Leary @ City by the Sea (Insurance)

@Alexander Felice

Somehow I must have incorrectly plugged the numbers into the form to generate this post. I’ll be all in at 84050 and refi for 83300ish. Should be left with about 750 in the deal.

Appreciate any insight on better opportunities. Always looking to hit a home run, but happy with base hits too :)

@Mitchell Shimabukuro

Nope, no penalty.

@Steven N.

I’m not sure how this got sideways in this post (I must have jammed something into the form wrong), but to date, accounting for closing costs in the refi, I am ALL IN at $84050. I should be able to refi for 83,300, leaving only ~$750 in the deal. Happy to share the PDF report if you like.

Thanks.

Investment Info:

Single-family residence buy & hold investment in Fayetteville.

Purchase price: $170,000
Cash invested: $4,500

Purchased this home with a VA loan for 4K all in in 2014. Its a cute house in a GREAT school district and currently rents for $1250/mo on 1 year leases (leases same day, sight unseen, any time it's on the market). Building equity to convert to cash-flowing assets in 5-10 years.

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

I was a first time home buyer with no experience. It made sense to buy in a great neighborhood near great schools, and now this property is a great equity builder that will probably never be vacant.

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

Connected with a real estate agent through USAA home buying program. Nothing special, could have gotten a much better deal but this has turned out okay.

How did you finance this deal?

VA loan, Zero down, ~4k in closing.

How did you add value to the deal?

We lived in this home for 4 years and ensured that it was in top-market shape when we were ready to leave Fayetteville.

What was the outcome?

Home rented sight-unseen in <6 hours on the market. Gets 1250/mo which covers expenses, reserves, and property management evenly.

Lessons learned? Challenges?

I walked into this as joe-blow home buyer. I got really lucky because my intuition told me to buy in a good school zone. Moving forward, know who you want to rent to--people who care about where their kids go to school are also people who will likely make responsible tenants.

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

My property manager is Lindsey at Nest Managers--she is phenomenal. She manages my BRRRR house also, and will be my go-to for 10 properties I will acquire next year. Go see her!

Investment Info:

Single-family residence other investment in Fayetteville.

Purchase price: $60,000
Cash invested: $33,549

Contributors:
Shelby Osborne

BRRRR in Fayetteville, NC. Brought to my agent by a wholesaler. Purchased with a commercial loan and renovated with a commercial line of credit. A local lender will lend 85% LTV for the refi in March 2020. I expect the property to appraise at ~98K, so will leave ~$2800 in the deal which provides a 54% CoC ROI and $40K in profit after sale in 5 years, which can be exchanged into another asset.

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

Limited initial capital makes the BRRRR strategy the most accessible for me. Also, I think that BRRRR investing is a smart way to mitigate risk in otherwise unpredictable economic times.

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

A wholesaler brought the deal. My broker/agent has built a robust lead generation network and caters to investors.

How did you finance this deal?

I used a commercial loan. A local bank offers no-financials on <100K. The note note is a 15yr FRM at 3.9% with a 7 yr ballon, and requires 10% down.

How did you add value to the deal?

My property management team and contracting team conducted a renovation to allow us to seek top-of-market rents. I used a commercial LOC for the repairs.

What was the outcome?

Repairs were completed in 5 weeks, and the property is currently rented on a 1 yr lease at $1100. Plan is to refi in march, using the same commercial lender who will lend at 85% LTV. Should leave ~2800 or so in the deal, which results in a 54% CoC ROI and could yield a 40K profit after a 5yr sale.

Lessons learned? Challenges?

(1.) I put the wholesaler in a bad spot when private money fell through and I had to switch to a bank mortgage--I should have been better prepared and communicated better at the start. (2.) Though I lived in Fayetteville for years, I've never seen this home. I should have teamed-up my property manager and contractor for the initial estimate from day 1...I didn't, and after the contractor-only renovations which cost $15K, my PM went in and said we needed $5K more work to get top rents.

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

Five Pillars Realty is an awesome investor-focused firm in Fayetteville--Shelby, Dan and Mike are rockstars. Lindsey at Nest Managers in Fayetteville is the best PM I have ever spoken with--they also offer all real-estate services and can help with acquisition, project management, and PM. Tina at First Citizens bank was is master at providing financing solutions.

Hello, 

I am an investor with several investment properties already (all in NC). I am in Newport, RI currently, and am ready to house hack an MFH immediately. Looking for a Triplex or Quad that can accommodate several families (no 1/1 units).

Can anyone recommend an investor-minded agent in the Newport area? What about a Property Manager, Contractor, Handyman, or Banks (want use my VA loan option)?

Also, can anyone with experience in the Northeast with older homes give any advice? Things to watch out for? I have always lived and owned homes in the south, most built much more recently than the average home in these old New England towns. 

Appreciate the feedback. Hope to take down a great property before New Years! 

-Peyton 

@Jeff K., check out Five Pillars Realty in Fayetteville. Shelby Osborne and her team are rockstars and can get you plugged in to a great network. 

Nothing should hold a potential investor back from the first deal if the numbers make sense, resources are available, and they have a team they trust in place--I get that, and I am moving. But for those that are a little ways down the road, is there any advice on how they wish they would have structured themselves a little better at the outset? 

For context: I am in RI and want to do a BRRRR investment in NC. I have the resources (private lending) and am connected to a fantastic team that offers world-class support to real estate investors at Five Pillars Realty in Fayetteville, NC led by @Shelby (Osborne) Johnson. 

My specific questions: 

1. Did you form an LLC? At the outset or later? Where was the LCC formed in relation to your property? State of the property? Does it matter?

2. Did you setup separate banking? Personal or in the name of your LLC? Any particular bank or account type?

3. Did you consult a CPA or RE attorney with your first deal? Were they local for you (in your state of residence or occupancy), or local to the property wherein you were investing? Does it matter? 

4. Did you use any sort of finance software (like quickbooks et al) to keep track of everything for taxes? 

This stuff seems likes in the weeds right now, but there have been a number of endeavors where if I had known enough to organize myself from the start, things would have been more efficiently later. I plan to do several of these very quickly once i get started, and think it makes sense to have a structure in place to make that work.

Appreciate any insights.