All Forum Posts by: Sawyer Smith

We in the past year we have had 2 pretty incredible deal come our way. They are both historic renovations on large (50k+ Sq Ft) buildings that are solid structure. Because sign over the state and federal historical tax credits to the bank as our down payment, we are essentially able to finance the $5 million renovation with no money down. The second building is pretty much the same, but because its a blight on the city they are essentially giving it to us for free. So in this case we are looking at a $7 million cash flowing asset in exchange for a $100k donation to a historical non profit in the area. We have done our market research and there is a real need for market rate rentals in the area, The city and public are very on board with both projects, and by our number we should see close to a 300% COC return on these projects. Obviously there are going to be some roadblocks along the way, and we don't expect this project to be painless.

So here is my question, Is this too good to be true? Where are the holes in our plan? Or is this a solid investment opportunity?

Feel free to be as cynical as possible.

My business has grown to the point where we are hiring an in house property manager. Along with a bunch of other trading we will be doing I would like to find some sort of seminar or event to send them too. Any one have any suggestions?

In July of 2019 me, my dad, and my brother all partnered up and started using the BRRR method on a $43,000 home. Fast Forward to October of 2020 and we just closed on our 32nd home.

With my dad acting as the Private Money Lender/Mentor in Colorado, my brother and I have been able to use $315,085 and the BRRR Method to buy $2,646,000 worth of Singel Family Homes that generate a 76.06% Cash on Cash Return.

So yeah, the BRRR method seems to be nice.

@Kaylee Walterbach 

We have a historic YMCA building under contract. 52,000 SQ FT 5 story building with a 32 car paved parking lot, and an additional 37 car concrete parking garage (estimated value $500,000) to be renovated into an apartment building. Rehab is bid around $3,500,000 (after historical tax rebate). The estimated ARV of the total project should be around $9,000,000. We were watching it for a while as the price went from almost $1,000,000 to $480,000. We got it for $450,000.

Obviously the deal is not said and done. But at this point with all of our research the numbers, economy, and housing needs in our area we are very confident. Our hope is to be all in at close to $5,000,000. Then refinance the project and pull out almost $8,000,000 to go toward our next project. 

@Bryan Noth We were using that at the beginning. but our actual appraisal value was way off from Zillow's number. Zillow is pretty handy if they actually have the sale price of homes in that area. 

@Bryan Noth We have one of those. I was mainly thinking of something where you could pin all those addressed on a map just as a visual reference of what homes are priced at in those certain areas. Where I am investing the value fluctuates street by street almost. If we were able to have it on a map I thought it would make it easier for us to see trends in what areas we wanted to be in or stay out of.

In the last year, we have had 20 of our properties appraised and refinanced. Our comps are close but there is room for improvement. I would like to create a database of all our previous appraisals and the comps used for those appraisals in order to be more accurate in analyzing future deals. That way we are not guessing on what the comps will be in certain areas.  Does anyone know of any programs that can display this information on a map or maybe have any other ideas on how to organize it all? 

@Jaysen Medhurst, normal LTR price would be right around $675-$700. So including expenses, the difference in cash flow isn't that much.  However, the quality of tenant we attract by listing it to traveling medical professionals rather than your average renter who can only pay $650 is a big payoff. Little to no repairs are needed, never late on rent, and we will never need to worry about having to evict. This is my Fist time doing a rental this way so I'm also trying to learn more about this type of market. I'm pretty sure I can up the rent on our next go to make a substantial difference in cash flow, but for our first one, I was being cautious. 

Investment Info:

Single-family residence buy & hold investment in Joplin.

Purchase price: $55,000
Cash invested: $60,000

Single-Family Home (2 bed 2 bath 1000 SQFT) near the hospitals.

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

Its relative location to the Medical District

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

Found it through our Kellar Williams Agent. Negotiated from 70k down to a closing price of 55k.

How did you finance this deal?

Cash

How did you add value to the deal?

we added value by purchasing it at the price we did. After all the repairs and furnishing the house we had a total of 60k cash in the deal. After refinancing we pulled 61k out and left a 15% down payment with the equity we had created.

What was the outcome?

We have listed this house on Furnish Finder, a listing service for traveling medical professionals, and are currently renting the unit out for $850 per month (1.2% RTV) to very responsible tenants.

Lessons learned? Challenges?

I learned not to be afraid to do something a little different if the number work. Normally we do LTR but wanted to try out the Furnish finder because they had offer 200 requests a year in our area, but not a single listing near the hospitals. It worked out well and we are now looking to start doing more in that area.

@Jacob Fitzgerald

Hello there! I might be heading down there soon just to drive and get to know the area, would you want to meet up sometime and let me pick your brain on the area?