All Forum Posts by: Reece Riggle

Joseph and Jordan,

I just saw an outside view of the homes and they need substantial work. Might be able to do some minor repairs on 1 or 2 but the majority need full remodels. I gave an offer but doubt it will be accepted. It was 12 properties in total but I'm only interested in 6 of them. 

The current rents are well below the medium for the area. Basically around $500 per house. Once repaired it would bring around $900 per house each month. Just with those 6 houses it will most likely need $225,000- $250,000 in repairs. 

I am contemplating buying a rental portfolio from a real estate investor in my area. All the properties are occupied, but they need to be remodeled. The projected cap rate is 11%-12% which is not bad at all, especially considering that once the remodels are complete, rents will more than double. The appreciation will likely be at least $300,000-$400,000.

I have a good lender that I have completed multiple deals with but want to make this an easier transaction. I am curious if other investors create a business plan or provide other documentation to loan officers? Any tips or advice will be greatly appreciated!

@Dave Spooner I have 2 other houses in the process of a remodel. Trying to pick up 2-3 houses a year over the next 3-5 years.

Investment Info:

Single-family residence buy & hold investment in Ardmore.

Purchase price: $37,000
Cash invested: $30,000

My first Residential Buy and Hold. Was condemned by the city when purchased.

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

Cash out Refi

How did you finance this deal?

Conventional financing through local Bank

How did you add value to the deal?

Did a complete remodel.

What was the outcome?

Have gained $30,000 in equity and cashflows $350 a month.

Lessons learned? Challenges?

More issues than what was expected and took 6 additional weeks to complete than what was planned.

@D.j. Wischmeyer I would reach out to your lender and ask why they don’t agree with the appraisal in detail. If the Appraiser completed a good report with data supporting the sales comparison or income approach then I’d question the lender.

If they are unwilling to provide the funds on a good deal then there will be other lenders out there to help.

I’m an appraiser and get questioned by underwriters often. Sometimes it’s a silly thing that can be easily resolved. Hope this helps.

@Joe Hammel thank you for your input.

Yes, I did use a line of credit to purchase these homes. The local bank will only allow a 20 year mortgage at 4.5%. My line of credit is around the same. I was planning on doing a cash out Refi and do a 30 loan rather than 20. Due to the condition of two of them I doubt a lender other than my local bank would approve.

Once the remodel is complete then it would be no problem to Refi through a different lender.

This is only my second deal, crazy how fast properties can accumulate!

I am in the process of buying 3 rental houses. These are currently under contract and pending financing. This is a package deal for $130,000. My estimated value for the 3 homes is $220,000 once a $40,000-$45,000 remodel is complete. My question is should I refinance all of these once the remodel is complete and pay off my line of credit. I was considering flipping one house as it does not meet my 3 bedroom criteria. I could use the proceeds to pay down my loans and payoff the line of credit. My goals are buy and hold for long term. This is my second deal.

House 1- rents for $850 a month- buying for $60,000

House 2- rents for $700 a month- buying for $40,000

House 3- Is in need of a $30,000 remodel. Will rent for $800-$850 once remodeled. - buying for $30,000

@Bryan Senker I would get more than one quote. Anytime I do a remodel I get at least 2-3 quotes. Quality of work is also important when it comes to price!

I will have to go take a picture of the outside sometime. The exterior is not nearly as impressive at the moment. The Building burned down in 1915 and the exterior facade has changed. My goal is to remodel the frontage once I have enough equity. 

Investment Info:

Office Space commercial investment investment in Ardmore.

Purchase price: $100,000
Cash invested: $105,000

My wife and I purchased a Historic Building built in 1885. My great grandfather owned this building in the 1940's till 1971. We purchased this building and completely remodeled the upstairs units. My parents assisted me with the remodel and after 9 months of hard work we transformed this gem of a property. The upstairs was not touched since the 1940's and was in need of significant repair.

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

Wanted to take on a big Project in an area I grew up.

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

My uncle and I wanted to invest into Main Street in Ardmore. He knew of a Business owner that had two buildings for sale by owner. He would only sell if both buildings were purchased. My uncle bought one and I purchased the other. He gave us a price and had it under contract in 1 day.

How did you finance this deal?

Local bank loan

How did you add value to the deal?

We spent $105,000 remodeling the entire upstairs units. In total we now have 8 office's upstairs and a 2,500 sf office/retail space downstairs.

What was the outcome?

I purchased the property for $100,000 and spent an additional $105,000 for the upstairs units. Currently the cash flow is $500 a month. This cash flow should increase around $250-$350 once the leases renew this summer. The property appraised for $250,000.

Lessons learned? Challenges?

I will strive to find more contractors to assist with the remodels so my time is not spent working a 40 plus hour job and remodeling on the side. It was hard to balance my time with my wife/family, work, friends, and personal health.