All Forum Posts by: Richard Forton

What exactly you looking for in a property management company? Not sure of the size of the unit or units but I know personally I have found that my singles and up to my 10 unit I was better off without management. I found myself managing the management companies. with automated rent collection and repair request, plus having decent properties. Self management has been very easy. I think the threshold to get management would be larger complexes or over 40 units with smaller places...

I am also in the area, Harford County, Just my thoughts. Goodluck

Hey BP Family.

I am in a unique situation and need some financial advice or tips! Little background on me. I have bought and sold everything from SFH to 10 unit buildings. At my peak a few years ago I had 34 units at once. Currently I own 8 units over 3 properties. So here is my issue and question:

Almost two years ago I bought the place where I live now. Was able to steal the property for $490,000 and spent about $70,000 in renovations to the main house. The property came with two homes on one parcel. The other house is actually a split level duplex. I have been working with an engineer for a few months to subdivide the property but the process is being very slow. With a loan balance of $380,000. My lender is 100% confident that my main house where I live can easily carry the note with a 75% LTV based on the fact that houses in my area like mine are selling for over $550,000-$600,000. Meaning I can have the duplex free and clear to borrow against. The duplexes in the area are selling for $225,000-$280,000. Thinking mine would appraise for $250,000. I am trying to get some long term debt, 15+ years against this property.

Are there any other options instead of waiting for the long drawn out subdivision?? I have tried to get a HELOC or some kind of loan/refinance on the entire property but the banks don't divide the two buildings for the appraisal since the property is currently listed as residential. The amount I can get for the HELOC does not interest me, its like $40,000. I wouldn't have any interest for anything less than $140,000 so the numbers are not even close. Any ideas or should I just keep waiting?

@Joseph Frausto hey man. I actually live in havre de Grace. From the area. And have owned 36 units in the area. Down to 8 right now. Let me know if I can answer any questions for you. You can message me directly

Hello all! I am a medical sales rep and real estate investor in Maryland. I have owned 37 units over the last 6 years and recently have sold a couple big deals to get out of some partnerships and older properties needing renovations. I currently have 10 units but this latest purchase has me feeling like a rookie!

I bought a smaller, wildly desirable location, studio single family in a downtown area in Havre De Grace, Maryland 6 months ago. I paid $60,000 cash for the off market deal, which was probably 25% discounted. I had a relationship with the owner. After about $7,000 in repairs I have had a renter in place for 3 months, going on 4, paying $1,000 a month. 

I have been trying to get a long term loan or even a line of credit against the property and have had no success. The typical response I have been getting is that the deal is too small.

Anybody have experience with financing on smaller properties? I have been thinking of looking at private lenders, even though the rate will be a little bit higher. I did not expect to have a lot of my working capital sitting in this place.

@Ashley Lauterbach here is the number (410) 939-8680. But I am not sure if they do out of state. This office is close to me. However maybe they can refer you to somebody that can help?? Goodluck

Nope. That is exactly what mine is. Just requires that larger down payment of 20%. I had to go to a mortgage specialist “SWBC mortgage servicing” to even get the loan. All the banks just told me no or that I could only get a commercial loan. Banks just didn’t want to do the extra work since it’s not a normal loan. At least that’s my opinion lol

I just closed on this exact type of property this past Friday. I used a Freddie Mac loan. It did require 20% down. But almost all of my local banks wouldn't give me a 30 year fixed rate and wanted to look at it as an investment property. I got 30 year fixed at 3.125%. Property is two houses. The main house that we are going to live in that has a in-law suite that's being rented. The second house is a split level duplex with renters. It was a great loan with great terms if you can swing the 20% down.

Investment Info:

Large multi-family (5+ units) commercial investment investment in Aberdeen.

Purchase price: $280,000
Cash invested: $120,000

6 unit one bedroom apartments
3 storage units

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

I was able to buy this as my first deal. I used owner financing for the deal and have been able to cash flow and use this property as a bank to buy other properties.

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

I had a relationship with the owner and knew they were looking to sell. But after more talks I learned they really wanted to have cash flow without the headaches of ownership and managing people.

How did you add value to the deal?

I have renovated half of the units and raised all the rents

What was the outcome?

I still own the deal today and currently have about 50% debt on the property. The property still cashflows nicely.

no property has been sold in the last year in that neighborhood except one other duplex. But it was a crap hole and never got fully renovated. That is what I can not stand about the rip off of appraisals. They used the purchase price of that duplex, similar in size but the inside needed a lot of work. The other two comps were also ran down properties in neighboring towns. But in this area I am in the difference in the town is huge for the value of the property. The other two comps were in terrible areas. I did attempt to dispute it but with no luck so far. This is actually my 3rd refinance in that area and the other two times I had a hard time as well before finally getting what I wanted. I almost feel that appraisals for 2-4 units are something that always will be trouble cause its so unique. The financing on my larger building was sooooo much easier.

It was September 2018 and my portfolio at that time consisted of a 6 unit building with 3 storage units that is worth $410k and brings in about 4k gross a month, and in a neighboring town I have 3 duplexes and a half of a duplex all within a block a part of one another. 225k, 170k, 150k and 98k purchase prices and rents ranging from $950-$1,300. all units were bought with good tenants or only empty for maybe 2 weeks after I purchased the property and all but one of the duplexes, the 150k one, were upgraded in last few years.

That September I thought it would be a good idea to try my first BRRRR. I bought a duplex next to my others and the purchase price was $130K and I got the owner to do interest only owner financing on the entire $130k for up to 2 years before loan was due. Also my first owner financing experience. Payment is $705 a month. I work full time in Radiology and can do some of the work but in total the rehab took 6 months and about 60k if you include holding cost. Went to refinance the property recently after having new renters for 2 months, $1,100 on each side. I am thinking it is worth at least $210k and can pay the loan off and put 30k or so back in my pocket. The appraisal came back at $150k!!!!!!! Not even worth me doing a refinance right now to pay off the owner financing because I would actually have to put up money.

Anybody ever have appraisal issues like this when trying a BRRRR?

I was excited to get into a property with having less than 20% of the value put up by me and having everything brand new but it just did not work out that way. All my other properties I did the 20% down and had no less than 20% ROI every year. Now this property I have close to 40% of the property value into the property. Making my ROI about half of my normal 20%.