All Forum Posts by: Scott Sherin

@Andrew Bonar are you planning to refinance the home? Depending on your projected ARV, it seems like this deal may make for a great BRRR with that rent price!

@Dave Spooner 

Hey Dave, thank you for showing interest in my deal deep dive! I have not yet completed my refinance, but I plan to after my seasoning period is over. This will allow my to recycle my capital and start offering on my next property!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $52,500
Cash invested: $75,000

My very first investment property I hope by doing my own "deal deep dive" I can spark the curiosity of others who visit my page who would like to share insight on this deal or anything else real estate related!

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

I had gained a good understanding of this market and this particular neighborhood. I was seeking a value-add deal that I could be all-in for under $100k. After developing my set criteria and diligently analyzing deals, I was able to find the one that worked for me.

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

By subscribing to Redfin alerts and practicing deal analysis, I was able to find a distressed property with some value-add opportunity. The real estate agent I used for this deal was a big resource for me, as she walked through the property in person to help me gather my information.In order for the returns to make sense for me, I knew that I wanted to be able to collect rent for 1% or more of my all-in cost. After estimating some rehab numbers, I was able to determine my maximum offer price.

How did you finance this deal?

This property was purchased with cash. I was able to present a business plan to a few family members in order to raise money for the purchase price, with intent to pay back their investment + interest once I am able to refinance. The rehab budget came from the money that I have managed to save up over the years.

How did you add value to the deal?

I was able to add value to the deal through renovation. I realized that the house was cosmetically outdated, and I knew that I would be able to force some equity in the home by modernizing the bathroom, kitchen, and add a few other things.

What was the outcome?

After completing renovations, this home was listed on the rental market. It will rent for $800/month and earn about a 6.5% COC ROI initially. After refinancing, I will still meet my criteria of >$100 cashflow and will increase my return to around 10%-11%.

Lessons learned? Challenges?

Persistence is an important factor when it comes to locating good deals. I analyzed hundreds of properties that did not work for me in order to find one that finally did. It seems the investors finding the best/most frequent deals are the ones willing to create systems and pipelines in order to look at as many potential deals as possible.

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

By taking some time to create relationships with agents, contractors, property managers, and other investors - I was able to lean on them to assist me in meeting my goal. Providing value and treating others with respect is a great way to develop and foster these relationships!

Like others have said, I would get multiple bids as well. Even paying contractors $50 each for taking time out to give you a scope of work is a plenty worth while investment and could end up saving you thousands.

@Andrew Lake my best advice would be to develop your criteria and practice analysing deals that match the criteria. That way when you find a good deal, you’ll be able to recognize it. That guy Nick in the comments owns a property or two in Indy, he should be able to give you some sound advice. Best of luck

@Diane Tycangco while turn keys can sometimes be a good option, you’re essentially foregoing any “value-add” opportunity, because somebody has already added the value and reaped the benefits before selling you the property. I wanted to do turnkey at first because it felt easier and safer, but then I changed my strategy. Don’t be afraid to leave your comfort zone and search for properties that may require some amount of renovation. Break it down into steps, develop relationships with real estate professionals who can assist you, network with investors who have already done what you’re trying to do. The fear factor goes away, you end up learning a lot more, and you can end up with better returns. Hope this helps, reach out if you’d like to hear more about how I closed my first deal in Indy while living and working in NJ

If you'd like an overview on real estate investing:The Book on Rental Property Investing by Brandon Turner

If you'd like to get into strategies and processes of REI: BRRRR & Long Distance Real Estate Investing by David Greene

If you'd like to understand the plausibility of early retirement through real estate: Set for Life by Scott Trench

In my opinion, reading books to help change your mindset are the most helpful because that acts as a foundation to obtain more knowledge like Atomic Habits, No Excuses, or Extreme Ownership. Shoot me a message if you're interesting in hearing more about my book recommendations! Always happy to pass along some knowledge

When I first begin my OOS search, turnkey seemed to make sense for me as well. I've come to find that you gain a lot more knowledge (which in my opinion is the most valuable outcome of a first deal) by working with an agent, be willing to buy a property in need of work, recruiting and vetting your own team members, etc. This hands-on approach can be more time consuming, but it can often result in better returns and, like I said, a much more thorough learning experience. Send me a message if you'd like to hear more about my process to closing my first deal!

@Kaitlin Brewer Brandon Turner's "The Book on Rental Property Investing" is in my opinion the best starting point. David Green's book on BRRRR & long distance real estate investing were very influential for me also!