All Forum Posts by: Patrick Menefee

@Nicholas Sheridan, Jr. As @Chris Mason said, when Fannie and Freddie say no it’s difficult. You have options, but before making a decision I’d ask the purpose behind your goal? What’s important to you? Why does it have to be RIGHT now? Why does it have to be multifamily? Which is more important? Is it worth paying more for a loan that fits your goal? If yes, how are you going to pay for the higher fees? If it has to be a multifamily right now and higher fees are unacceptable, why not owner occupy? Setting goals are great, busting @$$ to hit them is even better, but know why you’re chasing what you’re chasing. And the answer should ideally have true meaning to you

That said, you have these options that I’m aware of:

Short term loan/hard money-an option if you can force appreciation to refi, but still requires some down payment and fees are extremely high

Commercial loan-if you shop around a bunch you may be able to find one that will do 80%. Fees will be a little higher but not as high as short term money. Biggest downside is loan term-likely 5yr fixed with either balloon or variable rate, plus 15-20yr amort schedule meaning much higher monthly payments

Private loan/seller financing-find a place where the seller is willing to finance, or find a rich friend/family member to act as the bank. Difficult to find, amazing if you do. I wouldn’t bank on it

Owner occupy-it sounds like this isn’t an option for you, but it’s almost the only way you’ll get a 30yr fixed rate from a bank on a multifamily

Buy single family-if timing is the most important to you and you HAVE to buy a deal next month with 20% down, find a good single family

Find a discounted multifamily-obviously will be at a lower cost than a single family, making this difficult. But this truly seems to be the only way you can meet your timeframe, with your target property class, without paying extra, and without owner occupying

Save more money-wait until you have the money for a 25% down payment

Because I couldn't tag them in the section to recommend professionals, @Kevin Stringari and @Chad Carter (not sure why I can't add him) with Bottom Line Property Management

Investment Info:

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

Purchase price: $92,000
Cash invested: $8,500

The duplex was vacant but partially updated. The smaller unit (2br/1ba) needed updates inside, the larger (3br/1ba) was almost completely updated with a couple minor exceptions

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

My focus thus far in my investing career has been multifamily properties. I owned a fourplex and 3 duplexes (for a total of 10 units so you don't have to do the math) prior to this purchase, so I had alerts on my phone when a multifamily property came on the market. I saw this one and immediately realized it had potential

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

Who says you can't find good deals on the MLS?? That's where I found this duplex listed for $105,000.
We went under contract for $100,000, the appraisal came in low at $92,000, and after some pushback from the seller he acquiesced and we closed at $92,000. Unknown to me at the time, the underwriter found an error in the appraisal so shortly after agreeing to the adjusted price we were notified that the appraisal was revised up to $97,000! Not upset about an added $5k in equity

How did you finance this deal?

A partner and I split this deal, and we went into it with a conventional 25% down mortgage

How did you add value to the deal?

Unit 1 - Painted throughout, installed new floors throughout the downstairs, replaced appliances, kitchen cabinets, the bathroom vanity, the majority of the light fixtures, and the old dirty light switches and outlets.
Unit 2 - Replaced water heater and range
Other - Repaired roof, added some foundation supports, and added curb appeal by painting the patios/doors, replacing porch lights, and putting new house numbers on top of the paint

What was the outcome?

The all in cost after purchase, closing costs, and rehab was around $106,000 and the units are currently listed for a combined $1,675! Not bad at all. While there are no immediate plans to refinance, the plan is to continue collecting the great cash flow and refinance if/when it makes sense and the market picks up in the town the duplex is in. Overall, very happy with the property thus far as well as the lessons learned!

Lessons learned? Challenges?

I don't have room for more than these 2, check IG for others!
1. Get hands on experience, even if you don't know what you're doing. Even if it's only once, you'll figure out what you do and don't like, where you can save $$, and you'll know what to expect from your contractors
2. Recognize the value of your time and your skills. It might take #1 to learn this, it did for me...some things were exhausting and I sucked at it. I'll now hire those all out, but do ones I like and can save $$

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

Bottom Line Property Management was a game changer, and a complete 180 from my property manager on another property. They were incredibly professional, communicate regularly, and produce results. Contact Chad Carter and Kevin Stringari (both on BP)

Investment Info:

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

Purchase price: $92,000
Cash invested: $8,500

The duplex was vacant but partially updated. The smaller unit (2br/1ba) needed updates inside, the larger (3br/1ba) was almost completely updated with a couple minor exceptions

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

My focus thus far in my investing career has been multifamily properties. I owned a fourplex and 3 duplexes (for a total of 10 units so you don't have to do the math) prior to this purchase, so I had alerts on my phone when a multifamily property came on the market. I saw this one and immediately realized it had potential

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

Who says you can't find good deals on the MLS?? That's where I found this duplex listed for $105,000.
We went under contract for $100,000, the appraisal came in low at $92,000, and after some pushback from the seller he acquiesced and we closed at $92,000. Unknown to me at the time, the underwriter found an error in the appraisal so shortly after agreeing to the adjusted price we were notified that the appraisal was revised up to $97,000! Not upset about an added $5k in equity

How did you finance this deal?

A partner and I split this deal, and we went into it with a conventional 25% down mortgage

How did you add value to the deal?

Unit 1 - Painted throughout, installed new floors throughout the downstairs, replaced appliances, kitchen cabinets, the bathroom vanity, the majority of the light fixtures, and the old dirty light switches and outlets.
Unit 2 - Replaced water heater and range
Other - Repaired roof, added some foundation supports, and added curb appeal by painting the patios/doors, replacing porch lights, and putting new house numbers on top of the paint

What was the outcome?

The all in cost after purchase, closing costs, and rehab was around $106,000 and the units are currently listed for a combined $1,675! Not bad at all. While there are no immediate plans to refinance, the plan is to continue collecting the great cash flow and refinance if/when it makes sense and the market picks up in the town the duplex is in. Overall, very happy with the property thus far as well as the lessons learned!

Lessons learned? Challenges?

I don't have room for more than these 2, check IG for others!
1. Get hands on experience yourself, even if you don't know what you're doing. Even if it's only once, you'll figure out what you do and don't like, where you can save $$, and you'll know what to expect from your contractors
2. Recognize the value of your time and your skills. It might take #1 to learn this, it did for me...some things were exhausting and I sucked at it. I'll now hire those all out, but do ones I like and can save $$

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

Bottom Line Property Management was a game changer, and a complete 180 from my property manager on another property. They were incredibly professional, communicate regularly, and produce results. Contact Chad Carter and Kevin Stringari (both on BP)

Investment Info:

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

Purchase price: $92,000
Cash invested: $8,500

The duplex was vacant but partially updated. The smaller unit (2br/1ba) needed updates inside, the larger (3br/1ba) was almost completely updated with a couple minor exceptions

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

My focus thus far in my investing career has been multifamily properties. I owned a fourplex and 3 duplexes (for a total of 10 units so you don't have to do the math) prior to this purchase, so I had alerts on my phone when a multifamily property came on the market. I saw this one and immediately realized it had potential

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

Who says you can't find good deals on the MLS?? That's where I found this duplex listed for $105,000.
We went under contract for $100,000, the appraisal came in low at $92,000, and after some pushback from the seller he acquiesced and we closed at $92,000. Unknown to me at the time, the underwriter found an error in the appraisal so shortly after agreeing to the adjusted price we were notified that the appraisal was revised up to $97,000! Not upset about an added $5k in equity

How did you finance this deal?

A partner and I split this deal, and we went into it with a conventional 25% down mortgage

How did you add value to the deal?

Unit 1 - Painted throughout, installed new floors throughout the downstairs, replaced appliances, kitchen cabinets, the bathroom vanity, the majority of the light fixtures, and the old dirty light switches and outlets.
Unit 2 - Replaced water heater and range
Other - Repaired roof, added some foundation supports, and added curb appeal by painting the patios/doors, replacing porch lights, and putting new house numbers on top of the paint

What was the outcome?

The all in cost after purchase, closing costs, and rehab was around $106,000 and the units are currently listed for a combined $1,675! Not bad at all. While there are no immediate plans to refinance, the plan is to continue collecting the great cash flow and refinance if/when it makes sense and the market picks up in the town the duplex is in. Overall, very happy with the property thus far as well as the lessons learned!

Lessons learned? Challenges?

There were too many lessons to count, but I'll hit 2 big ones:
1. Get hands on experience yourself, even if you don't know what you're doing. Even if it's only once, you'll figure out what you do and don't like, where you can save $$, and you'll know what to expect from your contractors
2. Recognize the value of your time and your skills. It might take #1 to learn this, it did for me...some things were exhausting and I sucked at it. I'll now hire those all out, but do ones I like and can save $$

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

Bottom Line Property Management was a game changer, and a complete 180 from my property manager on another property. They were incredibly professional, communicate regularly, and produce results. Contact Chad Carter and Kevin Stringari (both on BP)

@Kevin Stringari nailed it...you need to get more specific in your criteria. A 30 second search of single family homes around Charlotte under $250k yielded 353 results on the Realtor app, which is kind of like asking your significant other what they want for dinner and getting "food" as a response. What's important to you?

How many beds/baths do you want?

Do you want something that needs work, or something 100% move-in ready?

What is a "decent" commute to you, and is that by car or light rail? 

What is "decent" to you in terms of sqft? 

Are you looking to buy and live there for the next 30 years? Do you have kids and want a great school district?

That's what you need to think about first...think about what you want, drive around and look at neighborhoods that you might want to live in, go to some open houses, get a feel for the area, and narrow that down a bit.

@Solomon F. Oh i misunderstood what you were saying, I thought you meant could request a document that includes the line by line valuation in the appraisal. Thanks for clarifying

@Moritz Bode totally understand, Ive asked the same questions. Also where id recommend having a property manager on your team to ask, as well as a realtor. If you can’t tell from the listings or open houses what you should do, they can point you in the right direction

And just as a reminder, “standard” updates aren’t universal. Many people can get a fantastic return by laying LVP or laminate flooring down in place of vinyl, carpet, or linoleum. But nobody can say that as a fact...if your market isn’t the same, you’d be wasting money on it. Use the recommendations you get, but confirm each and every one of them by looking at properties in your local market to see if they reflect the same thing

@Cameron McNulty goal is to essentially triple my portfolio in 2020. I ended 2019 with 12 units, looking to add 24 in 2020 with an ARV cash flow of ~$3500/mo after all expenses and reserves. Also have big goals as far as building my brand through networking, podcasts, media, etc

@Shiloh Lundahl what made you choose the Triad? My properties are all within about an hour of Charlotte in all directions, but I'm UC for 4 units near the Triad. Would love to hear a little more about your pursuit of the LOC and podcast guest appearances as well as that's a goal for this year for my business as well. Best of luck on those goals!