All Forum Posts by: Tommy DeSalvo

Some exit strategies for buy and hold properties are things like selling the properties or refinancing.

Your overall plan and goals look pretty good, and are very similar to mine. You have yourself buying one 4plex per 3 years. I am currently looking for my first 4plex with an FHA loan. The plan is to refinance in about a year or so with a regular loan, and then use another FHA loan to get into another 4plex. Barring that, creative finance is king.

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I'm in the Cincy area, but let me know if I can help at all or just discuss different aspects of real estate.

And I'm back to the forums with another deal. This time it's an off market 4plex. The owner is an older gentleman that is trying to sell off his properties and retire peacefully. He hasn't raised rents in well over 10 years, and this is the part I'm wondering about. His units are $75 under average market rents. At the current rents, the numbers do not meet one of my metrics - $100 minimum profit per unit per door. However, with a $30 raise per unit, it does meet that.

Now, the question is: Should I use his current rents or the raised rents? Can I use the $30 raise or should I run the $75 raise? How often/how much can I raise rents in Cincinnati, Ohio? Should it be gradual, $25/year? or just up it as much as possible to the $75 as the units turn over?

Welcome to BiggerPockets! This is a great site to learn from and network with people. 

Check out the Start Here page http://www.biggerpockets.com/starthere

Then read the BiggerPockets Ultimate Beginner's Guide - A fantastic free book that walks through many of the key topics of real estate investing.

Also check out the free BiggerPockets Podcast - A weekly podcast with interviews and a ton of great advice.

Don't forget to set up your keyword alerts.

I'm in the Cincy area, but let me know if I can help at all or just discuss different aspects of real estate.

So this deal did fall through. I made multiple offers and they were all flat out rejected with no counter. I did some digging into the court records and discovered that when it was last foreclosed on, the previous owners still owed 119k on the mortgage. The bank tried to get it to sell for 136k at a sheriff auction, where it did not sell. From what I can tell they're already 20k lower then they want to be, and there is probably no pressure yet to get rid of the property. My mentor said they probably want offers close to their asking price. Which obviously doesn't work for me with the amount of work the property needs (about 20k). He said that they'll probably lower the price again in 3-6 months, and then in however long it takes for the upper management to push down the price to get it sold, my offer may be considered then, but it's on to more deals for now. Thanks everyone for the feedback!

I agree with @Engelo Rumora. The more numbers you run, the more confidence you'll have in determining good vs bad deals. I know this isn't a concrete rule, but consider the 100:10:1 rule. For every 100 deals you look at, you may place offers on 10 of them, and one offer may be accepted. Just keep plugging.

Welcome to BP! It's a great community to learn and network with. Join the local REIA and never be afraid of asking questions.

I definitely agree that this area is B-/C+. I was thinking the appraisal may get to 160 because a few other people I talked to said that appraisals for loans are generally a little higher than appraisals for selling the property. I did not know that the area had such a high vacancy. To be honest driving through mariemont, it didn't seem that... empty? Yup, as others on BP say, no need to leave money on the negotiating table by starting too high.

Great,  I would really enjoy sitting down and talking with another actual investor in the cincy area. Thanks!

Sale price is 350k and it's in bad shape and not up to code? I don't know anything about the Missouri market or the area that 8plex is in, but if that was in Cincy, it would probably not be worth that. Is it rented at all? How much are the potential repairs? Did you use the bigger pocket calculator, or one you've made yourself? Either way, make sure the numbers work, especially with the 2nd mortgage, before jumping into the deal. Best of luck!

Hello sir,

I would recommend Tryfon Christoforou of Sperry Van Ness | Commercial Real Estate. He specializes in 4-60 unit buildings in the cincinnati area. Office: 513-936-9113 .  Cell: 513-490-6881 . He's very knowledgeable and has been invaluable to me.