All Forum Posts by: Salvador Puente

Investment Info:

Large multi-family (5+ units) fix & flip investment in Woodland.

Purchase price: $1,130,000
Cash invested: $300,000

value add, very very VERY rough shape. Lots of upside potential. 415sqft garage that can easily be converted into an 11th unit. 2 vacant units that I remodeled and rented for $1,200 and $1,300 plus RUBS. It'll be a better than 1% deal in 6-9 months. It's a flip only if I can find an upleg to exchange into.

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

Price, size and proximity to home. I live in Woodland and I'm familiar with the local economy, tenant profile and future growth potential.

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

Local agent Sunny Gill brought the deal to me (Habitat Investments) and I offered $100K below owner's asking price. He accepted and then I was able to negotiate another $20k credit after inspections.

How did you finance this deal?

75LTV hard money loan at 6.25% which is crazy cheap for hard money. I remember market rates for apartments were at 5%-6% 10 years ago and hard money was at least 10%.

How did you add value to the deal?

currently adding value. I'm very good at doing complete turns under budget. I have a solid crew that can do just about everything and I keep labor at $200 to $250 per day.

What was the outcome?

The vacant units are fully turned and bringing in $2,500 plus RUBS. The 11th unit is in progress (garage conversion). There are 4 other units that are in AWFUL shape and I'm just going to terminate the leases in order to do a floor to ceiling remodel in all 4 units.

Lessons learned? Challenges?

Still learning. I thought I would have all 3 units done by Jan 1, 2021 but I was only able to complete 2 of the 3. Still not bad considering I closed Nov 5, 2021.

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

Sunny Gill. http://habitatadvisors.com/company-overview

I would love to participate in a meetup. Zoom or in person works for me. 

I agree with the previous 2 respondents. There are very few reasons to sell in this inflationary environment, especially if you have nothing you’re going to replace the property with. Also, if someone is offering you $100k for your property off market it’s likely worth $150k above what you paid if you go to market. 

$70k might seem like a lot but it will likely get eaten up by the high inflation in the real estate market and you’ll find yourself trading for a less valuable property in real terms by the end of the year. Good luck out there🍀 

Investment Info:

Large multi-family (5+ units) fix & flip investment in Woodland.

Purchase price: $1,130,000
Cash invested: $300,000

value add, very very VERY rough shape. Lots of upside potential. 415sqft garage that can easily be converted into an 11th unit. 2 vacant units that I remodeled and rented for $1,200 and $1,300 plus RUBS. It'll be a better than 1% deal in 6-9 months. It's a flip only if I can find an upleg to exchange into to.

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

great way to add both cash flow and appreciation

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

off market deal I was chasing for 2-3 years and seller was finally ready to let go

How did you finance this deal?

hard money loan at 6% and 75LTV and I used my savings for the down payment.

How did you add value to the deal?

in the process of renovating. Finished 2 units that were vacant and spent around $12k per unit which is pretty cheap for California and I upgraded everything and added washer/dryer hookups in one of the two units. See pics.

What was the outcome?

Still only about 3 months into the deal but so far I was able to raise rents, implement RUBS and turned 2 vacant units and added which added $3,830 to gross collections in 3 months.

Lessons learned? Challenges?

things never happen on schedule these days, haha. I learned to be more realistic about how quickly I can turn units. I thought I could turn and rent two 1br units in 1 month and turn a garage into a studio in 2 months. I'm 3 months in and the two units are done and rented but the garage is still in progress....

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

Sunny Gill who is an allstar! Habitat Properties in Sacramento. Look him up!!

@Julian Wyer Thanks Julian. Feel free to reach out to me if you want any advice on your first deal. I'm much more comfortable in the multifamily space and I'm happy to share what I've learned in my years of investing. 

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $3,950,000
Cash invested: $900,000

Value add opportunity. The goal is to buy out all the leases in order to quickly reposition the asset and refi for 10 years and hold forever.

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

Underpriced, 70s construction of mostly 2br units in as strong CA market in the greater Sacramento area. Proximity to Davis, CA and Sacramento along with strong population and job growth and very little new apartment supply make this a great deal. If I'm successful in my reposition it'll be slightly better than a 1% deal in California which is not easy to pull off.

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

I did not represent myself (let agent double end the deal) and I simply offered asking price while competing buyers were haggling over $15K (on a $4million deal!??) and I locked it up for 120 days (seller wanted to close in 2022 for tax purposes so quick close not important to him) and I was very aggressive in my inspections. I was able to get a $50,000 price reduction in exchange for removing inspection contingency and was able to close Jan 12th,,, about 50 days before I had to.

How did you finance this deal?

Sold a duplex and a condo for down payment and got a hard money loan for the remainder at 6.25% for 24 months with no pre-payment penalty. I should be able to refi in 6-8 months.

How did you add value to the deal?

add value in progress...

What was the outcome?

we shall see lol

Lessons learned? Challenges?

I made the offer knowing that I needed to close on 2 properties to make it work or I would have to scramble to find investors which I did not want to do.

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

Marc Andenmatten at Newmark real estate