All Forum Posts by: Ryan Monty

Hi all - I'm considering buying into a house hack situation, a 2 or 3 unit (most likely 2) building that has the potential to duplex.  I would live in the duplexed unit and rent the other(s).  I'm also open to duplex up, but I'm assuming this is likely more difficult.  Please correct me if that's an incorrect assumption!

Obviously I'd love to keep the costs to a minimum, so I"m wondering what things an experienced eye would look out for in the showing/buying process to identify potential problems or advantages a property may have compared to other options?

It seems like finding a building that already has an "in-law" unit in the basement is a great start.  It's already finished, so I'm assuming one of the main jobs needing to be done is building the interior stairs.  It's not very important to me to add an additional bathroom down there if there already is not one.  Nor would I care to add a kitchen.  I would just like additional comfortable living space down there, and probably a sectioned off area for the laundry, etc.   

Also, what would a ballpark be on this work if all I needed to do was build the staircase and possibly add some walls?

Hi folks - does anyone investing in the Chicago market have a good recommendation that they have personally used to finance the long-term financing on BRRRR deals that works well with needs like ours?

@Andrew Postell- fantastic info - thanks so much! I've read your post as well and I really learned a lot - awesome stuff. Here's a question I still have after reading all this: in my specific scenario, I have an off-market property I'm currently talking to the seller about. No price has been discussed as of yet. Good comps have been hard to come by. I know that either way, I still need to obviously arrive at some ARV that I feel confident enough to work the negotiation against.

Here's my dilemma: my agent friend told me that in his experience, a lot of times the appraiser that the bank sends will simply just go off of the negotiated contract price, and maybe add a SLIGHTLY higher amount if it's obviously a bit under market on that contract. Since we are talking off-market, I am obviously trying to negotiate as low a price as possible to get into the property, but the lender won't have a listed property that has been "price-tested" against the open market. I may be buying very low compared to the true ARV, and may be able to get much more after the minimal repairs I think I need, but if this is true about the bank's appraisal, they are just going to come in near the contract anyway. But I am not flipping, I want to buy-and-hold/cash out like a BRRRR (but with no 'bridge' financing needed except maybe seller carry until I can close my long term loan). So, how can I try to ensure that the bank won't use my "low" contract price to form the appraisal opinion vs. what we know would be the true (hopefully much higher) ARV?

Hi BP crowd - I'm a new investor looking to do some BRRRR deals and I know I need to find the right types of lenders who are going to be able to work with me. One thing I'm worried about is that they send an appraiser in and they come in too low for me to cash out. I want to get a ballpark from the lender ahead of time if at all possible. Also, I'm finding some deals that don't really need much done as far as rehab, so you probably wouldn't consider that a BRRRR, however I can still operate it like a BRRRR potentially as long as I buy low enough to build in 70% LTV at the purchase. How would you go about finding a lender for this type of strategy? Also, do they need to be local? Thanks!

@Alex Bekeza - thanks for the advice. It's been an interesting thread - half the people saying they still can BRRRR with a tenant or two left over as long as they can at least rehab one of the units. I guess if you can force appreciation with just those couple of units you do rehab, and buy low enough, you can still BRRRR

@Jon Kelly - no, it's a different property than the original post. At this point, only thing holding me up is getting all the right people I'll need to walk the property and give me expert opinions. I need help determining the ARV, what makes the most sense to repair, and i also want to have a few different sets of deals up my sleeve to offer the seller. I want to try seller carry financing, but I also want to have hard money as a back-up but need to find one that is OK with doing the funding with tenants in place because so far a few weren't willing to do that.

My long-term goal is a BRRRR portfolio, but if I have a relatively safe margin, even as a flip, I may go through with the project just to get a rep under my belt.

@Jon Kelly - thanks. I have no purchase price or ARV yet. Still talking a lot with the seller online, but I believe I'm the only interested party as it's off-market. Even though I'm in Chicago city proper, we were having a very hard time pulling good comps to at least even get a ballpark. This may factor in good for me since the seller will also have a hard time looking at the market and getting a good idea of value. All I know is they are a motivated seller - stated they're in need of funds sooner than later and this inherited property needs to be liquidated. I'm trying to really get all my ducks in a row before I walk the property as I don't want my total lack of experience to be too obvious!  

@Josh Caldwell , @Andrew Postell - hah.  I don't why I thought seller's would be expecting something specific.  How many people have even ever been in the position to sell a home and were offered the possibility of financing it themselves?  Obviously very few people. I have to get past my limiting beliefs here

I would love to read more on the concept of actually having the talks with the seller and solving their problems, if you all have any good blog or book recommendations there.  And here I thought you just go in with a set of numbers and hit the seller over the head with it!  

Great advice on using the title company to help out.  I really wasn't sure who would be the correct folks to help me with the paperwork part....

I'm about to begin negotiations with an off-market seller of a property I would like to BRRRR. Because there is a good tenant in place, the current owner stated they would like to keep them around, plus I believe this would likely save me a lot of money vs. using hard money for my "bridge" financing, I would like to have a seller carry option to offer in negotiations ready to go.

As an investor, how do you structure seller financing?  What's best case scenario for the investor?  Where do you start negotiations and how do you step things closer gradually to an acceptance on their end?  How do you sell it to the seller as a good option they should go with ?

I am confused on if this financing is amortized like a conventional loan, or do you make it interest-only with a balloon?  What's a common term and rate in today's market?

@Jon Kelly - thank you! Awesome ideas. Now just to determine which repairs, if any, like you said would really boost appreciation beyond the dollars put in. This is the hardest part for me right now as I lack the experience.

I am told the vacant unit needs “updating” as an old lady lived out her last days there (the owner). She took good care of the building supposedly and replaced things diligently. The tenant’s unit is supposedly modern no-frills rental trim. Any thoughts on what types of items boost the appraisal the most per dollar invested?