All Forum Posts by: Steve Iacobbo

You'll want to explore the rent to own market, but to do this properly and avoid all the problems you hear about (because most people do it wrong) you'll want to put a BUYER in the home, not a renter. You will make more in the long run, you will NOT be a landlord, and you'll wonder why you didn't do this will all your properties.  Disclosure: I'm an investor, not a realtor, I work in the creative finance area but not in the state you are in so I can't help though I might know investors who can. 

@Michael Le. That's a fair point, but what exactly does it mean to "know" someone in this context. If I meet someone on BP who has a deal does that count as knowing them? I'm not trying to be difficult, just really trying to understand.

Hi.  I'm considering investing as an LP, in a syndication with Stellar Multifamily Enterprise on a deal in Huston, TX.  The numbers seem reasonable and in general, the deal looks pretty good.  I don't know anything about the Team however and was wondering if anyone has ever invested with this group.   

@Alicia Marks. Fear less, try more things.

Investment Info:

Single-family residence fix & flip investment in Burrillville.

Purchase price: $165,000
Cash invested: $35,000
Sale price: $230,000

Surprises around every corner on this one, but the end results was a nice, simple, single family home with a brand new kitchen and a MUCH dryer basement.

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

The location was really nice and the price was good for the location. Rehab also seems straight forward, though I has guessed wrong on that part.

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

This deal was found on MLS and my realtor negotiated the final price.

How did you finance this deal?

Financing was combination of partner funds and private money.

Lessons learned? Challenges?

Many surprises awaited me on this deal. Also, the location was a bit farther away than I would have liked so I learned to stay closer to my main area because the commutes were a real pain.

Investment Info:

Single-family residence fix & flip investment in Woonsocket.

Purchase price: $88,000
Cash invested: $37,000
Sale price: $170,000

This project taught me how to (and not to) coordinate multiple contractors. Timing is everything. Leave lots of room in your schedule in case things change.

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

The purchase price of the property made this a good deal, even with the extensive work that was needed.

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

This deal was on MLS.

How did you finance this deal?

Financing was all cash. I partnered with an associate who funded most of the project and then sat back. I coordinated the effort. The end result was a win for everyone!

How did you add value to the deal?

Handling all the paperwork and logistics is what I do as well as dealing with contractors, towns and adjusting the plans as needed.

What was the outcome?

A great home bought by a retired U.S. Navy veteran and his wife.

Lessons learned? Challenges?

Be ready to pivot when needed and don't let setbacks throw you. Things happen, don't panic, just work through it.

My personal residence and a commercial property I own are on the same piece of land under the same mortgage. The commercial part (separate address, yes separate address but on the same mortgage, go figure) needs some work, about 50k.  I currently rent out the commercial part but I know I can get more for it if I update the property - new roof and updated heating/AC are some of the things needed, so the renovations are more than cosmetic. I don't have enough free cash to do all the work. I'm not sure how to gauge what the value of the rehab'd property would be.

One option is to refi now and see if there is enough equity to increase my HELOC to do the rehab. If there is I can use these funds, but this would leave me without investment funds after the rehab, so I'm not sure I like this idea. Someone else said not to do that, but rather to use my current funds to do as much work as I can, then reif after the work is done because the value will be greater. I guess I'm not sure how to accurately estimate what the values of the property will be after the work because there aren't any similar situations around so I'm not sure how to evaluate my options in this situation.

I'd love to hear from some folks with more experience about this.  Thanks.

Steve

Investment Info:

Single-family residence fix & flip investment in West Greenwich.

Purchase price: $75,000
Cash invested: $15,000
Sale price: $129,000

This was my first flip. A small, single family home near a lake. One bedroom and a loft area on the second floor. Bought by a single dad with a 3-yr old son.

I'm currently working on my 4th, which will either be another flip or a buy-and-hold.

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

I was a bit intimidated with the whole "real estate investing" thing but this was a simple project that didn't seem overwhelming.

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

I have a great realtor who is also an investor. He's acting as a mentor while I learn the ropes.

How did you finance this deal?

This was financed via money from my HELOC and with the help of a hard money lender.

How did you add value to the deal?

The house was partly done, but the owner did not want to finish it. I bought the house and finished the rehab.

What was the outcome?

A very nice, newly updated small home by a lake.

Lessons learned? Challenges?

I learned a LOT about how to get money, the paperwork that's involved when dealing with certain types of lenders and that it's important to have a team of people (realtor, attorney) helping you through and explaining the parts you don't understand.

The challenge was estimating the rehab costs (went a little over) and making sure contractors keep to a time table.

Hi Kenneth, 

With regard to breaking even... I wouldn't call that "bad", I mean, it's better than losing money, but I would think turning at least a small profit would be better. Although you will certainly gain experience regardless of the ROI (return on investment), by making a profit you are in a much better position when you approach potential lenders because you can show that you actually make money at real estate investing.

I am talking about liability insurance.