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All Forum Posts by: Sebastian Garcia

Sebastian Garcia has started 3 posts and replied 8 times.

Post: Amazing Fourplex in Lake Charles

Sebastian Garcia Posted
  • Lake Charles, LA
  • Posts 9
  • Votes 4

Yes sir! I agree that Fox Run is a great part of town. Lucky I was able to land it. 

Post: Amazing Fourplex in Lake Charles

Sebastian Garcia Posted
  • Lake Charles, LA
  • Posts 9
  • Votes 4

@Steven Lee Absolutely! We are all in this to learn and continue to grow, so I am always happy to help.

Post: Amazing Fourplex in Lake Charles

Sebastian Garcia Posted
  • Lake Charles, LA
  • Posts 9
  • Votes 4

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $350,000
Cash invested: $72,000

Bought a 4-unit multifamily property for $350,000 with the seller agreeing to pay for $7,000 in closing costs. Each unit is 2 bedrooms and 1.5 bath, living room and separate kitchen. Each one is 1000 sq ft and two-story. While looking for a house in Houston to move into and house-hack, I increased the purchase price I was willing to pay. Given that I was not happy with any place I could find, I decided to take a look back at Lake Charles. I found this property on Zillow and asked my realtor to schedule a time for us to go see it. I ran the numbers conservatively assuming rent at $750/month. Once I saw it, I knew the potential and that it could easily rent for more. I moved into one of the units and made this my primary residence to lower the interest rate on my mortgage. I was able to get 4.125% for a 30-year term and paid $350 in points. One unit is occupied currently with a longer-term tenant paying $830, but I just rented one of the other units. With these two units rented, I already cover the P&I, taxes, and insurance. Very lucky to have found this property in Lake Charles available, but once it was out there, I did everything to secure it!

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

Always interested in multifamily to mitigate risk of vacancy and have found you can typically get lower pricing per unit. It also makes it easier to manage properties like this because they are in the same location.

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

Found it on Zillow. Went to see it and put an offer that same day. Was told there were other offers and to place my best offer. I placed the highest I could, almost matching their listing offer, but making sure at first that the numbers would work at that price point. It still did beautifully, with cash flow of $800 and ROI of over 12%.

How did you finance this deal?

I went through a mortgage broker who works closely with Fidelity Bank. I received a recommendation to use him through my realtor, who I have done business with before and who I can trust. The person knew the area well and made the closing very simple and straightforward.

How did you add value to the deal?

So far I have not added much value to the property but once moved in, I intend to start work on it to bring value of rentals up. I am also purchasing a washer/dryer for each unit to increase the rent amount that I can charge.

What was the outcome?

The outcome is that I just moved in to the property with my roommate from before. He pays me little in rent, which still adds to cover mortgage and other costs. I have recently rented one unit out, and I continue to charge for the one rented by long-term tenant. I will try to find a suitable tenant for the fourth unit and then continue to save and look for the next big deal.

Lessons learned? Challenges?

Run the numbers. If the numbers make sense, then the offer is still good. I had to go up in my offer by $25,000, but the offer was still good and it was still a good deal. Due to coronavirus, I was scared towards the end of closing because I felt like property values would go down a bit. But when thinking about this as a long term investment and knowing that property values will likely go up over the years, I was comforted by the notion that this was still a great deal.

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

Yes, my realtor name is William Kracijek. I would highly recommend him for his service and his dealing with the listing agents and knowledge of the market. The mortgage broker I used was John Hoffpauir from Nola Lending. He managed to get me a great interest rate and was very responsive whenever I had questions.

Post: Duplex in Lake Charles

Sebastian Garcia Posted
  • Lake Charles, LA
  • Posts 9
  • Votes 4

Hey Greg! Yeah, it truly turned out to be. For the first property I was getting myself into I was looking for something that was not a big capital commitment but making sure that the numbers still made sense. I also was looking for something where I could learn about light remodeling (painting, flooring, etc) and it paid off. It's always incredibly beneficial whenever you can do something like that because you become more proficient at these things, you better understand the time it takes and the cost, and additionally you increase the value of the property! Finding the property manager was a bit of a task at first and learned that it's something that should be taken care of before you even close on a property. Ended up finding one after a failed one which actually charged less per month (8%) and do a much better job at keeping up with the tenants and property itself. Sometimes it will take a little while and can be frustrating, but always understand that there ARE people who will do a good job at managing and you should not be afraid to move on from bad ones to get to the good ones!

Post: Duplex in Lake Charles

Sebastian Garcia Posted
  • Lake Charles, LA
  • Posts 9
  • Votes 4

Hey there Terry! Glad to hear fellow real estate investors are in the area. You know, I have found that multi family properties are hard to come by around the Lake Charles area. However, they can be great investments if you find them. The duplex I currently own is performing well and was relatively cheap but definitely had some luck to find it. Even with that luck, I had to do some work on it (paint, foundation repair, other small fixes) in order to get it rented and cash flowing. I believe there are some other multi family properties currently in the area but they are indeed limited. I am currently under contract for another one actually and will be closing on it next week. The rental market is also a bit slow right now with the virus looming, but I believe they will still be great long-term investments. Keep your eyes peeled for some and I will do the same. If I come across any more I will let you know. Possibilities for partnerships do exist as well! 

Post: Duplex in Lake Charles

Sebastian Garcia Posted
  • Lake Charles, LA
  • Posts 9
  • Votes 4

Hi Joseph! Had been looking for a little while before I got hold of it. Had to do some TLC in order to get the rent higher but definitely found it to be worth it. I have found in the area that SFH do not make for great investments here since rent is not as high. Multifamilies are not that common around the area, and if there are some, I have found that they are not in the best conditions. Are you looking in the area for multifamily?

Post: Duplex in Lake Charles

Sebastian Garcia Posted
  • Lake Charles, LA
  • Posts 9
  • Votes 4

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Lake Charles.

Purchase price: $86,000
Cash invested: $29,000

Duplex house investment in Lake Charles, LA. First unit is 2 bed and 1 bath. Second unit is 1 bed and 1 bath. Big backyard for use by tenants. Located close to downtown. Multiple new plant constructions ongoing around the area, bringing numerous potential renters for the next 10 years.

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

Find multi-family properties to have more benefits than single family.

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

Found it through real estate agent I work with and negotiated it after seeing it and also after conducting inspection.

How did you finance this deal?

Chase Bank

What was the outcome?

Recently made some renovations on units to increase cash flow. This included indoor/outdoor paint and lawn care improvements.

Lessons learned? Challenges?

Dealing with a poor property management company. Unfortunately, around the area there are not many offering services, which now puts more of the responsibility on me to take care of the unit. Has made me learn how important it is to have people around you which you trust to run the property like a business.

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

Worked with real estate agent to attain the property. Lender was Chase, which offered low interest and additionally 75,000 pts as a bonus to my credit card.

Post: Hello! Seeking advise on out-of-state purchasing

Sebastian Garcia Posted
  • Lake Charles, LA
  • Posts 9
  • Votes 4

Hi fellow investors, my name is Sebastian and I joined BP a couple of months ago. Since first listening to the BiggerPockets podcast and reading several books on rental properties, I closed in on a duplex in Lake Charles! I used the "Analyze a rental property" tool and am now cash flowing $350 total each month. I have learned a ton by performing some cosmetic repairs on the unit which was vacant, but becomes tough when at work for 12 hours/day. My business partner and I are looking for new opportunities to continue to grow our portfolio but our areas are not hot right now (Lake Charles) or are too expensive (NY/NJ).  We have been looking at the different types of rentals and potentially purchasing a turnkey in a different state, but would appreciate advise on what to look out for and how to develop a trusting relationship with people over the phone/email who you have never met in person. Can anybody comment on this and share your experiences?