All Forum Posts by: Phil K.

@Josh C.

Hey Josh!

So I ended up purchasing this for 62k - then immediately placing a lien on the property for ~82k. I was shooting for this because I wanted to be at 75% of ARV. Went to my long term lender and he was able to appraise it at 110k - which satisfied the lien of 82k. I purchased for 62k, put in about 19k, got that back after I refinanced with my long term lender. I put 3k as I like to put some cash on the side as reserves :)

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $62,000
Cash invested: $3,000

Single family BRRRR in Indy in the Bean Creek neighborhood.
62k Purchase
18k Rehab
110k Appraisal

In my opinion, its a fantastic decision. Depending on your loan if you are using FHA - if you can build enough equity where you can refi out, you can get another FHA house hack. Then the first property will be cashflowing and you'll be house hacking another one. I'm also guessing now that you'll be slashing your rent in half - you can also feed that into your savings to ensure you have reserves. Once you have the proper reserves you can begin to save for the next one if you want!

I've had to do some updates for sure. A few issues here and there but nothing that can't be worked through. Worcester is a very competitive market at the moment. Ensure you have a strong offer with solid terms, when going through the inspection period you can always try to work with the seller but bear in mind this is a strong market. 

-Phil

Investment Info:

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

Purchase price: $65,000
Cash invested: $20,000

BRRRR Duplex over on the east side of Indianapolis. It was my first BRRRR deal and I was all in on the deal 120k and appraised value is 150k.

Hi Spenser,

If you can lower your current rent by house hacking - you'd be saving yourself considerable expenses over time - all while owning a duplex. I think even though you aren't "cashflowing", you would still be saving because of the offset in your current rent (if you live towards Boston that is). 

If you can get yourself a 3 unit even better, or if you can find one a 4! The 4's are tough to come by but as an owner occupant the 3 other units would definitely enable you to potentially "cashflow".

The one thing I want to mention with the Worcester market - ensure that you have proper reserves. With most of the stock being older properties built ~1900 - if the property was not kept up with you'll run into a number of old things such as....knob and tube, lead paint, asbestos wrapped piping. All things over time you would potentially have to replace.

Good luck on your search and congrats on getting on the train!

 -Phil

@Christian Nachtrieb There's a few different routes you can go, forced hot air, boiler system with baseboard, or combi units (water heater/boiler with baseboard). All of these options are not cheap, as Timothy was saying - try to keep the parlors and gas on gas stoves for as long as you can.

@Timothy Lewman Yeah I'm keeping mine as long as I can, just know that they are more on the end of life sooner than I anticipated. Looking forward to more!

@Timothy Lewman Couldn't agree more Timothy, I know what to look for in Worcester! I'm not a huge fan of those gas on gas stove and parlor heaters at all! Look forward to making more deals happen.

Investment Info:

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

Purchase price: $395,000
Cash invested: $100,000

Traditional buy and hold that was purchased off market. Currently working on upgrading some of the units while keeping existing tenants in the building.

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

Get my first deal under my belt! Moving from stock investing to real estate investing

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

Off market. Negotiated contract price after working with my agent.

How did you finance this deal?

Traditional investment loan at 25% down.

How did you add value to the deal?

I will be upgrading some of the units as they turn, there is a new city initiative that may allow 50k grants per unit

What was the outcome?

Cashflowing!

Lessons learned? Challenges?

The first deal will always be the hardest, even though this is a great cashflowing asset, I did miss some capex items which I am working with now.

@Kelsey I would be careful about the pet fee's as well as charging a background check fee, definitely double check your county laws and what they cover. In my state of MA, we cannot charge anything but first, last, security, and rekey fee.

What I have seen regarding the background check fee, is that the tenant pays for this on their own accord, and will give you a copy of the check. A lot of websites can do this for you and have heard a lot of landlords running with this method.