All Forum Posts by: Reagan Clo

Quote from @Kerry Baird:

Awesome purchase! Great way to use the equity in the first property to obtain the next. What lender did you use for the HELOC? Did you have a Federal Pacific box? I have had a few of those over the years, and use it as a negotiating tool. Replacing the electrical can be quite expensive.

I used Truist bank for my HELOC.
I can't remember the name of the electrical box but I know it was prone to catching on fire, and had done so in the past. However, no one told me this, either the seller or inspector. Federal Pacific does sound like it though.

Investment Info:

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

Purchase price: $255,000
Cash invested: $30,000

This is a duplex I found on the MLS in Palm Bay Florida. I used a HELOC on my home as a down payment and around $30,000 of my own money over the course of 6 months to repair it. Both sides are rented for the long term. This is also a buy and hold strategy.

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

I am interested in buy and hold deals to generate a large amount of passive income so that I can angel invest and be financially free.

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

I found it on the MLS. It was being sold for $270,000. I offered $265,000 on the basis that the unit I did not get to see was fixed up. When I saw the other unit and it was torn up, I lowed my price to $255,000 and the deal was accepted.

How did you finance this deal?

The down payment was from a HELOC on my house which perfectly matched the down payment needed. The rehab cost came from my own personal funds.

How did you add value to the deal?

I added indoor AC, as opposed to wall units, added new kitchen cabinets, new floors and painted inside and out.

What was the outcome?

Both sides have been rented out and the last second repairs are finally getting complete. I haven't made a profit yet, but I have only held the deal for around 7 months.

Lessons learned? Challenges?

Things broke that even the inspector didn't notice. One was a grounding rod for the electrical panels which caused my insurance to cancel since it was a fire hazard. Dealing with that was a major headache but I was able to get through it.

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

I worked with a Brevard County realtor named Kelly Walen. She was great and helped me through the buying process. I also use a property management company Elite Class. They have helped manage most of the rehab work that went on.

Hey, my name is Reagan. I have been a Bigger Pockets pro member for about a month and a listener to Bigger Pockets for about 5 months. I am looking to buy my first few properties this year, starting out with single family houses and working my up, using the stack method. I am looking for any investors, or other Bigger Pockets Members that live around the Space coast area of Florida to connect with. Let me know if you are interested.