All Forum Posts by: Sergio Baerga

Good day Bigger Pockets,

I am a real estate investor living in Puerto Rico.

My father of 78 years old is declining slowly mentally, and I am going to begin helping him out manage his properties and organize his finances and properties. He lives in South Florida and has about 7 properties all rented out from single family to multifamily. His current CPA is 75 years old, and we will be looking to change over to a CPA with a real estate focus. I am looking to find the optimal tax and legal structure to optimize his situation. Would like to know if any South Florida bigger pockets members can refer me to an expert in the Florida market that can guide me in the right direction.

Thanks and God bless

Good day Bigger Pockets,

I am a real estate investor living in Puerto Rico.

My father of 78 years old is declining slowly mentally, and I am going to begin helping him out manage his properties and organize his finances and properties. He lives in South Florida and has about 7 properties all rented out from single family to multifamily. His current CPA is 75 years old, and we will be looking to change over to a CPA with a real estate focus. I am looking to find the optimal tax and legal structure to optimize his situation. Would like to know if any South Florida bigger pockets members can refer me to an expert in the Florida market that can guide me in the right direction.

Thanks and God bless

Investment Info:

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

Purchase price: $204,000
Cash invested: $327,000

10,000 sq foot property on 1 acre of land. 8 Unit property with 1 rented out at time of purchase. I remodeled the 4 that were in decent condition and the other 4 I finished building. Currently 8 units rented out at different rates.
$6,100 gross rent. Cash flow around $5,300

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

Lack of deals available during pandemic

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

father had kids living in the property and he wanted to retire and cash out.

How did you finance this deal?

Cash

How did you add value to the deal?

Remodeling the whole thing, new bathrooms, roof, etc.

What was the outcome?

A solid nice property in optimal conditions.

Lessons learned? Challenges?

Dealing with locals in large construction.

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

Joel Diaz my real estate agent, he doesn't speak english very well. But he is an investor which experience in construction and many real estate deals on the island.

@Spencer Gray

thanks spencer greatly appreciate this advice

@Greg Scott

Hey greg that’s right, the info came right off the bigger pockets calculator.

I honestly didn’t manually check - i trusted the calculator

the property has 17/18 units fully rented

and thwt is the average rent it brings in.

I planned on fixing up. each one as the tenants move out.

@Chris Reel

Hey Chris thanks a lot that was very helpful going forward.

@Sergio Baerga

the noi and cash needed are inverted as the copy paste from the calculator switched it up

@Greg Scott

Hey when i copy and pasted from

the calculator it inverted the numbers

the noi is. $80,825.20

Hey guys, myself and a friend I met on bigger pockets found a deal in our area of San Juan.

$400,000 asking price

18 units. $10,500 receiving in rent.

It has some low cost units as they are not in great condition and some are quite small.

The location is great and has 17/18 rented long term at the moment meaning it will cashflow from day 1.

It is poorly managed and still booked because it is a desirable area walking to nightlife restaurants highway and close to airport.

Even a great spot for airbnb.

Monthly Income: $10,216.00

Monthly Expenses: $5,545.46

Monthly Cash Flow: $4,670.54

Pro Forma Cap Rate: 12.43%

NOI $129,000.00

Total Cash Needed: $80,825.20

Cash on Cash ROI: 43.45%

Purchase Cap Rate: 20.21%

The question is both of us have smaller deals and cash flow airbnb long term but never have partnered up, and would like to know if anyone could give advice as a starting point?

LLC 50/50. what terms should the contract say?

What type of financing should we go for?

Any advice on how to go about this would be great and helpful as we are excited to take on our first large deal.

Thanks

Investment Info:

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

Purchase price: $72,000
Cash invested: $23,000

Triplex in Bayamon, Puerto Rico. Foreclosure. Minimal rehab necessary, roof with danosa(good shape), only 1 kitchen to be replaced and 1 bathroom and a paint job. $1,575 rent estimate.
Loan 6.5% at 30 years with 25% downpayment.

Unit 1 (studio)
Unit 2 (2 bedroom/ 1 bathroom)
Unit 3 (1 bedroom 1 bathroom)

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

27.09% cash on cash return $725.24 monthly cash flow.

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

I purchased it from the bank offered half of the asking price, then I was accepted at $80,000 once I walked thru and re ran the rehab numbers i lowered the price to $72,000 waited 4 weeks more and the bank accepted $72,000. If it doesn't cost you money to offer, run the numbers and offer away, you learn and meet new people each time you do this.

How did you finance this deal?

Financed it under the LLC that I formed when i purchased my first property off Xome.com auction.
This one is from a credit union. I coudn't use banks because they charge commercial loans, have shorter terms higher interest, and some balloon payments.
This will be in the corporations name, for 6.5% 25% down and 30 years. (3 points closing costs)

Lessons learned? Challenges?

I learned to offer on many properties, practice negotiating, get along with everyone, as you miss 100% of the shots you don't take. The original asking price on this house was $143,000. Run the numbers and offer what works for you.

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

Not really, currently studying to be a real estate agent myself, as many realtors on the island do not have great response times, nor do they go the extra mile to find the deal (nor run the investment numbers).