All Forum Posts by: Justin Melendez

Investment Info:

Single-family residence fix & flip investment in Fayetteville.

Purchase price: $72,500
Cash invested: $25,000
Sale price: $157,000

Fix and Flip

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

When the wholesaler let us walked the home we immediately recognized value. We decided to flip this home in order to build our working capital.

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

I found this deal on craigslist, it was being sold by a wholesaler.

How did you finance this deal?

Cash - I partnered with my brother for a 75%/25% split.

How did you add value to the deal?

Complete renovation.

What was the outcome?

We were able to successfully flip this home. Due to the supply contraction in our market, we were able to get $30,000 more than we originally planned to get on our ARV.

Lessons learned? Challenges?

There were PLENTY of lessons learned on this project. I'll focus on the most tangible, TERMITE DAMAGE. Never underestimate the amount of damage those little suckers can achieve. Going into the deal we knew there was termite damage in the crawl space. However, I grossly underestimated the amount of damage and the time and resources it would take to remediate them. In the future, we will be sure to better perform our due diligence and prepare our crew to deal with these types of challenges.

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

Spoat Jackson Browne Real Estate, Single Source Real Estate Services (closing).

Investment Info:

Single-family residence buy & hold investment in Fayetteville.

Purchase price: $102,000
Cash invested: $24,000

Long Term Buy and Hold

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

Similar to the last property I posted, this is a home in a stable "B" class neighborhood which I plan to hold for a long time.

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

Propstream List followed by a text-blast campaign.

How did you finance this deal?

Conventional Loan with 20% down.

How did you add value to the deal?

House was turnkey

What was the outcome?

Able to add another property to my portfolio with minimal cash flow at the moment. However, this property is below market rent by $100-$200 and is located in a desirable neighborhood. We will continue to accommodate the current tenant, if they move we will renovate and place a tenant at market rates.

Lessons learned? Challenges?

We had 2 conventional loans in escrow at the same time. We actually went under contract on the same day. I did not know this was possible. We used the same lender for both and I figured it would simplify the underwriting process and I think it did. We dealt with one loan officer/team to close both loans and there were little to no speed bumps.

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

PennyMac Loans and Harry Marsh Law for closing (both were great)!

Investment Info:

Single-family residence buy & hold investment in Fayetteville.

Purchase price: $105,000
Cash invested: $25,000

Buy and Hold rental in a great neighborhood, currently rented below market rent.

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

Looking for "B" class properties in desirable neighborhoods for stable cash-flow in the next 10-15 years.

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

Propstream List followed by text-blast campaign.

How did you finance this deal?

Conventional loan with 20% down.

How did you add value to the deal?

Minor repairs to address the tenants immediate needs/wants. This will help build our case to slowly raise rents. This property is currently rented $200-$300 below market rent. We have the ideal tenant right now and don't care to lose her, so we will slowly raise rents over the next few years. If she decides to move, we will completely renovate the property and rent out at market rates.

What was the outcome?

We continue to hold this property, this home and homes-alike are key to my early retirement plan.

Lessons learned? Challenges?

Dealing with conventional lenders can be a challenge. Stay on top of them and always asked them if they need anything of you. Often times you will find that there is an inquiry sitting in a queue somewhere waiting to be fulfilled and your loan representative had no clue until you asked. We were able to close this deal in 30-days despite this being a conventional loan in the middle of the COVID crisis/demand.

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

PennyMac for Financing and Hutchens Law Firm for closing (they were both amazing)!

Investment Info:

Single-family residence buy & hold investment in Raeford.

Purchase price: $239,000

This was out personal residence turned long-term buy-and-hold.

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

This property was never intended to be an investment. We purchased this property new construction and lived in the home for a few years. We have since moved out of state and decided to rent this home for some decent cash flow.

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

New construction, used realtor/builder.

How did you finance this deal?

VA Loan

How did you add value to the deal?

Just maintained it like it was my own, because it was :)

What was the outcome?

We have true cashflow of $265/month (accounting for maintenance, vacancy, capex, and management).

Lessons learned? Challenges?

This property stands to teach us a lot of lessons. It's our first property in an "A" class neighborhood. We recognize that we were able to secure rents are higher than usual prices due to increased demand and low supply. Understanding that, we need to be prepared to withstand rent reductions in the future. We also made the hard decision of renting the property out instead of capitalizing on a HOT market. Our opportunities to sell this home in the near future might not be as fruitful as today.

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

Joy Cooper, Caviness and Cates Home Builders

Checkout https://properpivot.com/operat... for before and after photos.

Investment Info:

Single-family residence buy & hold investment in Fayetteville.

Purchase price: $48,000
Cash invested: $25,000

Our first driving for dollars deal.

Update: Converted into a short-term rental (AirBnB)! checkout out updated pictures.

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

This deal was located in a neighborhood that had a proven track record of good STR performance. When we bought it we knew that we could convert it to an STR once the current tenant moved out.

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

Driving for Dollars using Deal Machine. We cold called and sent mailers to the owners. The owner was tired of being a landlord and had bad experiences with their property manager. I was willing to buy this property tenant-occupied as well as purchase it as-is.

How did you finance this deal?

Cash

How did you add value to the deal?

Complete renovation. New kitchen, updated bathroom, refinished floors, and furnished.

What was the outcome?

As I am writing this, this is our first month as an active STR and we pulled in gross rents of $2300 in 3-weeks. Note, STR's come with more expenses than a traditional LTR so about 40-50% of that will be profit.

Lessons learned? Challenges?

We wanted to do something different for this project, this was my "experiment". So what does that mean? I went looking for vendors who were unknown to the "local investor community", aside from our contractor, we tried to pull our resources from unfamiliar vendors. This approach came with inherent risks that we were willing to experience. The overall experience was very positive and we built some great relationships and introduced people to a new aspect of their own profession! 10/10 will repeat

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

Short Term Rental Property Management (Co-host): StayK Rentals https://www.staykrentals.com/ - Philippines-based group of professionals that run the day-to-day operations of the property for only 12% of revenue!

Investment Info:

Single-family residence buy & hold investment in Fayetteville.

Purchase price: $48,000
Cash invested: $3,300

Monthly Cashflow: $515 (pre-refinance)

This is our first deal we landed using Deal Machine and driving for dollars.

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

This is a pretty standard deal. However, what makes this one unique is that it is the first time we generated our own leads in order to find this deal. Due to inflated prices and a saturated market, we decided to begin generating and marketing to organic leads.

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

We drove for dollars. We used a combination of Deal Machine, virtual assistants (for skip tracing/cold calling), and direct mail marketing. We identified the sellers needs (tired landlord) and discovered the sellers goals in order to negotiate a win-win scenario.

How did you finance this deal?

Cash/Savings

How did you add value to the deal?

We are breaking this project up into 2 phases. Since we are inheriting a performing tenant, there is little to no work to be done. However, we chose to ask the tenant about his biggest frustrations with the property. We used his feedback to generate a list of repairs for phase I of rehab. Phase I included fixing the duct work, adding a vent fan to the bathroom, and fixing some electrical issues. Phase II will occur once the tenant moves out. Phase II will consist of paint, bathroom, and kitchen.

What was the outcome?

We kept the tenant in-place and turned the property over to a property management company. Once the tenant moves out we will convert this property into an AirBnB.

Lessons learned? Challenges?

Communication! Consistently communicate with the seller, attorney, tenant, and property manager.

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

Spoat, Jackson, Browne LLC

Jeremy,

Hit up the folks over at Five Pillars - @Chris Stroup @Shelby (Osborne) Johnson @Daniel Kidd. They are well versed in all things BRRRR and STR for the Fayetteville market. Best of luck!

I am under contract on a 3/1 rental as well with very similar numbers. Congratulations! 

Wow that was a great meetup! I am grateful I was able to catch the last hour. Lot's of brilliant minds, I look forward to moving down to Augusta and working with all of you! 

AugustaTomorrow is now my homepage :D