Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $280,000
Cash invested: $45,000
This is my first purchase of many, and ill be house hacking. Ill be living on one side for only 372$.
What made you interested in investing in this type of deal?
Bigger Pockets pushed me to make this deal happen earlier than later. Always wanted to get into real-estate but BP made me ready. Thank you; your podcast is what made go for it :)
How did you find this deal and how did you negotiate it?
Honestly I wish I can say I found this deal but it was all thanks to my realtor. I looked over this duplex many time on the market and even drove pasted by it several times but there was no info/picture on the duplex and it was on the market for 250+ days. I gave a list of duplex I wanted to see to my realtor. On that list he asked me if he can add to that list and I said sure. Funny enough this is the house he added onto the list
When negating I just lowed-balled them and went from there.
How did you add value to the deal?
For this duplex there was not much that needed to be done. If I wanted I could of really put a tenant in right away with little to no work. Regardless I am planning on doing a few upgrades regardless.
+ This duplex has no ceiling fans so I'm planning to install them in.
+ The side im living on has no tile so ill be add tile across the whole house.
+ New AC unit on the side im living on
+ Adding gutters around the whole duplex
+ Repaint the duplex
+ Adding minimum landscaping
Lessons learned? Challenges?
As of right now I didn't have any major life lesson when buying this duplex. BP really taught me how to prepare and I tried really hard following them and learning from other mistakes that I heard on the Podcast. Regardless It was not easy and there was some problems but nothing I would not do again.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I mostly learned everything my self with no real mentor. My realtor was brand new so we wear learning off each other and I think we made a strong bond out of that. I do truly recommend him as he is a go getter and very fast to getting what was needed, he name is
Joseph Cimini.
My broker also helped me a lot and he has many years of experience. The only problem was that he is a busy man and was not always available when I needed him so I tried not bugging him to much
Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $280,000
Cash invested: $45,000
This is my first purchase of many, and ill be house hacking. Ill be living on one side for only 372$.
What made you interested in investing in this type of deal?
Bigger Pockets pushed me to make this deal happen earlier than later. Always wanted to get into real-estate but BP made me ready. Thank you; your podcast is what made go for it :)
How did you find this deal and how did you negotiate it?
Honestly I wish I can say I found this deal but it was all thanks to my realtor. I looked over this duplex many time on the market and even drove pasted by it several times but there was no info/picture on this house and it was on the market for 250+ days. I gave a list of duplex I wanted to see to my realtor. On that list he asked me if he can add one to that list and I said sure. Funny enough this is the house he added onto the list
When negating I just lowed-balled them and went from there.
How did you add value to the deal?
For this duplex there was not much that needed to be done. If I wanted I could of really put a tenant in right away with little to no work. Regardless I am planning on doing a few upgrades regardless.
+ This duplex has no ceiling fans so I'm planning to install them in.
+ The side im living on has no tile so ill be add tile across the whole house.
+ New AC unit on the side im living on
+ Adding gutters around the whole duplex
+ Repaint the duplex
+ Adding minimum landscaping
Lessons learned? Challenges?
As of right now I didn't have any major life lesson when buying this duplex. BP really taught me how to prepare and I tried really hard following them and learning from other mistakes that I heard on the Podcast. Regardless It was not easy and there was some problems but nothing I would not do again.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I mostly learned everything my self with no real mentor. My realtor was brand new so we wear learning off each other and I think we made a strong bond out of that. I do truly recommend him as he is a go getter and very fast to getting what was needed, he name is
Joseph Cimini.
My broker also helped me a lot and he has many years of experience. The only problem was that he is a busy man and was not always available when I needed him so I tried not bugging him to much
Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $280,000
Cash invested: $45,000
This is my first purchase of many, and ill be house hacking. Ill be living on one side for only 372$.
What made you interested in investing in this type of deal?
Bigger Pockets pushed me to make this deal happen earlier than later. Always wanted to get into real-estate but BP made me ready. Thank you; your podcast is what made go for it :)
How did you find this deal and how did you negotiate it?
Honestly I wish I can say I found this deal but it was all thanks to my realtor. I looked over this duplex many time on the market and even drove pasted by it several times but there was no info/picture on this house and it was on the market for 250+ days. I gave a list of duplex I wanted to see to my realtor. On that list he asked me if he can add one to that list and I said sure. Funny enough this is the house he added onto the list
When negating I just lowed-balled them and went from there.
How did you add value to the deal?
For this duplex there was not much that needed to be done. If I wanted I could of really put a tenant in right away with little to no work. Regardless I am planning on doing a few upgrades regardless.
+ This duplex has no ceiling fans so I'm planning to install them in.
+ The side im living on has no tile so ill be add tile across the whole house.
+ New AC unit on the side im living on
+ Adding gutters around the whole house
+ Repaint inside and outside of the house
+ Adding minimum landscaping
Lessons learned? Challenges?
As of right now I didn't have any major life lesson when buying this duplex. BP really taught me how to prepare and I tried really hard following them and learning from other mistakes that I heard on the Podcast. Regardless It was not easy and there was some problems but nothing I would not do again.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I mostly learned everything my self with no real mentor. My realtor was brand new so we wear learning off each other and I think we made a strong bond out of that. I do truly recommend him as he is a go getter and very fast to getting what was needed, he name is
Joseph Cimini.
My broker also helped me a lot and he has many years of experience. The only problem was that he is a busy man and was not always available when I needed him so I tried not bugging him to much
Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $280,000
Cash invested: $45,000
This is my first purchase of many, and ill be house hacking. Ill be living on one side for only 372$.
What made you interested in investing in this type of deal?
Bigger Pockets pushed me to make this deal happen earlier than later. Always wanted to get into real-estate but BP made me ready. Thank you; your podcast is what made go for it :)
How did you find this deal and how did you negotiate it?
Honestly I wish I can say I found this deal but it was all thanks to my realtor. I looked over this duplex many time on the market and even drove pasted by it several times but there was no info/picture on this house and it was on the market for 250+ days. I gave a list of duplex I wanted to see to my realtor. On that list he asked me if he can add one to that list and I said sure. Funny enough this is the house he added onto the list.
When negating I just lowed-balled them and went from there.
How did you add value to the deal?
For this duplex there was not much that needed to be done. If I wanted I could of really put a tenant in right away with little to no work. Regardless I am planning on doing a few upgrades regardless.
+ This duplex has no ceiling fans so I'm planning to install them in.
+ The side im living on has no tile so ill be add tile across the whole house.
+ New AC unit on the side im living on
+ Adding gutters around the whole house
+ Repaint inside and outside of the house
+ Adding minimum landscaping
Lessons learned? Challenges?
As of right now I didn't have any major life lesson when buying this duplex. BP really taught me how to prepare and I tried really hard following them and learning from other mistakes that I heard on the Podcast. Regardless It was not easy and there was some problems but nothing I would not do again.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I mostly learned everything my self with no real mentor. My realtor was brand new so we wear learning off each other and I think we made a strong bond out of that. I do truly recommend him as he is a go getter and very fast to getting what was needed, he name is
Joseph Cimini.
My broker also helped me a lot and he has many years of experience. The only problem was that he is a busy man and was not always available when I needed him so I tried not bugging him to much
Been really busy these couple of months trying to get everything together and I'm happily to say everything has paid of thus far.
If you were not aware I'm a freelancer and my main issue was I could not qualify for a loan because I needed to show 2 years of income of being a freelancer, meaning I would qualify in 2022 because I'm a recent graduate with a freelancing job. So even though my credit score was a 746, I had no loans/dept under my name and my income was good; I could not qualify.
I decided I wanted to to buy homes/duplex in the begging of January of 2020 and I made a goal that in 10 months (end of November 2020) I would start buying; so I did not want to wait 2 years longer. Long story short I asked my boss (the company I was freelancing for) if they would hire me as a full time employ this was some time in June when I asked. They got back to me in July with an answer that they would be honored to have me but it came with a hard choice I had to make.
I had two option to pick from; staying as a freelancer or becoming an employee. But there are pros and cons to everything. Ill start with the pros.
This was a really tough choice for me because it was a lot harder emotionally than what you see from the pros and cons. I knew becoming an employee I would be landing in the middle class. There nothing wrong with that it's just I want more for me and my family. I'm not going to lie, yes it about money. But truthfully everything in the world revolve around money. For me I have big dreams and I need money to accomplish that. For example I want to make my own AAA game which is not cheap, make my future wife and future kids have everything they want and that just the tip of the ice burg. Unfortunately I have to start somewhere and what is more important. For me that was a secure job that I was able to stay with my family (my carrier requires me to move away from home and away from my family if I did not work at this job). But it's what you do after that makes it count.
For me I excepted the job, BUT I knew I wanted more and I was going to strive off that. I use this job as a stepping stone for my life. I planning on being here for years regardless; I love working here.
Anyway just 2 days before I went to my broker I told him I'm a full time employee starting on August 4th. He told me once I have proof of one month of income he can qualify up to 300k for me (keep in mind I qualified September 4th).
Now let me just skip to the ending and then explain my self after. September 4 2020 I officially signed an offer on a duplex and I am closing November 5th.
I swear everything just fit perfectly in a matter of a month.
So I had two realtors I was debating to go with. The first one was my neighbor and the other was someone I meet at a open house. They both were grate and I didn't know who to choose. Two weeks before I signed, I saw on Facebook that someone was selling there Xbox One (I buy and sell to make a little extra cash to help save up for a house/duplex). I message him if we can meet someplace to pick up the Xbox. Which we did at a local gas station. The thing was once we made the sale he told me to hold on. He went back in his car and to then gives me his business card (which he just got that day) and told me "I just got my realtor license are you looking to buy?" I remember looking at him and all I could think to say was "your a what?"
Right then and there I took it as a sign and decided to act on that and give him a chance. If it worked out we would be helping and learning from each other; and that's exactly what we did. I decided to make him my agent.
I waited a week to start finally acting because I still could not buy because I still needed to get my loan approve. So one week before signing, I told him I was not ready to buy just yet and needed a few months to get a littlie more money. He completely understood and wanted to still look so he can get practice. I was not going to say no because I wanted to practice and look as well and finally get my feet wet. (This gave me the opportunity to really have a one and one with a realtor defiantly when I'm him first client so we both wear not wasting each other time)
I kid you not I looked at three homes with him all in one evening no more no less. We both wear excited and very eager. I said I would give an offer for each home to see if there would be any bites, but I would low ball each offer thinking I would not here back. All showing I looked at wear duplex's and each were completely different.
The first duplex was the oldest of them all built in the late 1970's asking for 280k. It was nice but needed a lot of work and fixing up, so I offered 200k
The second duplex was built sometime in 1990's with a asking price for 265k. The duplex it self was completely renovated and needed little to no work. Only problem was it was a wood structure and I live in Florida wear we get lots of hurricanes which is an issue. I didn't really want this one but I still made an offer of 200k
The third and final duplex was the newest of all of them built in 2008 asking for 300k. There are some issues with the duplex but nothing to serious I could find. The place its self was very nice and I really like this one. I offered 265k.
Right now it's a sellers marking and I'm thinking there's no way I will hear back from anyone with my offers and I was ok with that. Well I heard back from the third duplex and they countered back with 285k saying I was the highest offer. I was amazed when I heard that because this duplex was very nice. it was a 4/4 (2/2 on each side) with a total of 2250 sqft. Everything was in great condition and was perfect for a small family. Huge master bedroom, big living room with an open kitchen plus a small den on each side. I could not figure out why nobody was offering on this. This duplex was on the market for 240 days so I did some research. Everything checked out; it's has city water paid for, comcast provided in the area, it was in a growing area, everything is near by, not in a flood zone. The only conclusion I could guess was there agents was very hard to get ahold of and he didn't post and pictures of the inside. I myself learned something here and maybe so can you. Ever heard of the saying "never judge a book by its cover" well the same goes for homes. Even if there no photo provided the inside can really surprise you.
[Brand new duplex here go for about 340k and older duplex that are fix up go for about 300k, I got this duplex for 280k. I'm predicting I can sell this house for 350k in the next few years. But not looking to sell anytime soon but if the price is right maybe]
Honestly I skipped over this duplex multiply time just because it had no photos of the inside so I came to the conclusion the inside needed a lot of work or was hiding something. The only reason we looked at this duplex was are realtor wanted to look at this place so he added onto just so we can have an extra showing. This was all thank to him and he really has been working hard on this to really make this happen (Thank you for everything).
Also I wanted to thank Bigger Pockets for everything I really learned a lot from this site and I learned maybe 85% of this under your podcast that I would listen to when I was working. I'm trying my best to follow through everything you taught me. My goal is to live for free and do the house hack for my first purchase. I made this excel sheet that break down everything.
The top image is the exaggerated number with the least income possible
I will be putting 15% down with a little help of my parent to make this happen I will be paying them back but I will be very tight for the next couple of months, that is why I have no "Other Monthly Expenses" added yet. When everything settle down I will be adding to that. I did save up 15k for any fixing. Plus I was talking to one of tenant and they been living there for two years already and willing to do another year for the same price of 1200 a month (cant count on there word for that but I do have a plan if they bail). They are very simple people and are very clean. All they ask is for tile floor and the other side they dont live on has tile so everything works out perfect.
Ill be doing lawn myself so need need to add that expense
Also I did the research and got the two hardest information I was having problems getting which are property taxes and insurance. Fortunately now I know how to get them numbers and don't have to worry as much as I have been since I know how to now.
Lastly the image below are the numbers I'm foreseeing and these are the number I predict will be more likely; but can easily change.
The monthly rent now is adding the 1200 from the tenant plus 200 for renting out the 2nd room on the side I'm living on, to my girlfriend sister.
The inflated numbers are now accrete from the quotes I've gotten.
As of now I'm very happy that I made this all possible in a matter of one months time from getting hired to signing. I made a goal of buying at the end of November but instead I'm owning a house before then if everything goes smoothly. Regardless if this deal dose not happen for what ever reason there will always be another.
As my journey progress ill keep sharing.
Hopefully you guys enjoyed my story thus far.
:)
Hey BP
About a year ago just after I graduated and just got a job as a 3D artist, I rented a house with a few of my friends. At that time I did not know what real-estate was. Now that I know more about real-estate and still learning all thanks to PB, I want to make sure I'm, not the landlord who does not care about there tenants and does not treat them with any respect; just as my landlord. I'm not here to talk bad about my landlord but to learn from him and not do what he is doing.
Here is an example I have learned not to do is taking advantage of a tenant. We are young so finding a house was hard for us because we have no history. I'm the oldest out of all my friends and let's just say the AC is older than one of my roommates. The Landlord knowing we could not find a house he decided to raise the rent even more. We had to take it because we had no other choice. I understand we are young and it's risky renting to teenagers and I honestly don't know if I would, but knowing that if someone is desperate and can't find a place to live, I would not raise the rent; ill just be hurting them more. I would say no but try to help them find a place.
Here is a simple example that I bet happens to a lot of tenants, and many landlords go through with and that is actually getting new appliances. Im not saying this makes him a bad landlord but more stingy with his money. I understand making things last long as possible but the fact that we are paying 400-500$ on electric a month because of an 18-year-old AC that is ready to go, that is just ridiculous. All I'm saying is the appliances don't have to be brand new just better where a tenant is not overpaying electric by 200$. Are landlord knows about this but he keeps bring an AC guy in to fix it but that only does so much. For this, I realized why make a tenant pay so much on electricity for old appliances, where they could use that money for something else like paying rent.
I think the worst of it all is putting a tenant in danger and there was nothing we could do about it. I live in Florida and we have lots of hurricanes here. Well, there was this one hurricane called Dorian that was supposed to hit us with a category 4; thankfully it did not. At the time though we kept trying to contact him but it kept going to voice mail knowing the situation that was going on. I forget but a day or two later he got back to us with an email (2 days before we were supposed to get hit). The email basically applied that we are responsible for buying all necessary resources such as wood, tools, etc and putting up everything then we had to take it back down and plug all the drill holes once this hurricane passed. Me being who I am; stubborn in my ways I said " No I'm not doing this. This is not my house or my responsibility, this is the owner job." Ok ok yes, I understand that he has to worry about himself and other tenants too and he can't do all this himself. The thing is I would have done it with no problem if he was will reimburse us for all the resources and labor, but he said "no". All I know is this was a huge hassle for me and my friend and I need to remember this. The anger, the disrespect, the fear... I don't want my tenants to go through this. It's scary and if I'm going to invest in Florida I will have to consider this and there is no way my tenants will feel what I went through.
I can't say the real reason why he did this and maybe he didn't realize this or maybe he just doesn't care. I'm not going to hold this against him I just wanted to share a small glimpse of my story to hopefully open someone's eyes if they are doing this. I'm also doing this for myself to remember how I felt to be a tenant that was mistreated. This is one reason why I got into real-estate to hopefully make people feel like they are home, to feel safe and respected but in all in not to go through what I have. And yet I'm still going through this with only 3 more months left.
(I do apologize if I offended anyone, that is not what I was trying to do, I only wanted to share my thought and opinion and hear what everyone else thinks)
Thank you both so much for replying back. While reading your guy's post, there is a question that popped up.
Is it better to pay a house full in cash or get a loan? I understand I can get a low rate and I can qualify for an FHA loan but wouldn't I lose more money having a loan in the long run? With a loan I have to pay interest which I have to pay more money for a duplex rather in cash I have more leverage plus I also get the full profit from the other half rent.
Hey everyone so I have been listening to "Bigger Pockets Real Estate Podcast" ( I do want to say how amazing there Podcast is, I'm already on number 108). Many great tips and advice that I took notes of. One of them is to keep asking questions on the forms and putting my self out there. Which I'm going to start.
That being said my question is, "Should I buy a duplex in full with cash but wait two years or if I can qualify for a loan I can buy a duplex in the next upcoming months with a 20% down?"
Before answering there are a few things you need to know.
1) I'm going to have trouble qualifying for a loan because I'm a freelancer; meaning I need to show 2 years of income history which I am a recent graduate. (I have great credit, no loans, and I have no trouble with making money)
2) Based on Bigger Pocket's term ill be house hacking meaning ill be living on one side and renting out the other half.
3) My parents say I can live at there house for the next two years till I buy the duplex, but I'm not sure if I can wait that long because I am ready to be on my own already.
4) On Bigger Pockets Podcast they are always saying to start as soon as you can but waiting 2 years is not starting right away. I am trying to be smart and make the best choices for me.
This is what I think:
If I wait two years to buy a duplex my goal is to hopefully have 200k in cash to pay in full but that means working crazy hours (which I'm ok with if its worth it in the long run) meaning I won't have any loans and I get all the income. Now with having that passive income from renting the other half plus working I then qualify for a loan because by then I will qualify for the loan since it has past two years. then I can buy another duplex with 20% down.
Am I correct? Is the best way to go?
Anybody else has any other opinion or suggestion that you can share.
Thank you, and kind regard
Ryan Plasencia
:)
I'll look into what an owner financed deal is. Thank you Brandon :D
All right I have some thinking to do, luckily I have 10 months to prepare and have a good plan,
Thank you once more Davis
