All Forum Posts by: Johnny Lynum

@Aditya Maini I say go for it! I live in the Leesburg, VA area and this area is on the higher side for real estate, but with low rates and the limited supply for the foreseeable future you should be fine. You will be able to save a nice amount of money each month that you can put towards a future down payment on your next house. I encourage you to look for foreclosures or short sales so you can start with equity from day one! Best wishes!

@Sean L. With long distance investing, communication is critical to an investor's success! As an investor, your job is to manage the property management company to ensure they are executing operations in an orderly fashion that meets your standards and expectations. If you can't agree on those items such as leasing process, reporting cadence, maintenance policy, then you need to find another PM company that aligns with your expectations. Once you speak with them, if you aren't on the same page, it may be worth asking other local investor's for referrals, so you can move on! A bad PM company can turn a good investment into a bad one. Good luck!

@Fran Dixon congrats on starting your real estate journey. Education is #1...biggerpockets, podcasts, books, REIA meetups. #2 Find your niche and determine multiple sources for your deals. #3 Take action...you can gain a ton of education, but without action it will be in vain. Continue to look to surround yourself with investors doing what you want to do and you will be on your way!

Investment Info:

Single-family residence fix & flip investment in Panama City.

Purchase price: $85,000
Sale price: $160,000

This was a 3 Bdr/2 Ba , 1,244 Sq Ft single family house. We updated windows and sliding door, painted interior/exterior, updated existing cabinets in kitchen and bathrooms, and updated light fixtures/switches throughout. Additionally, we cleared the back yard and installed a new fence.

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

This is our typical investment house.

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

It was the 2nd referral from a past client.

How did you finance this deal?

We leveraged our passive investor partners.

How did you add value to the deal?

We updated windows and sliding door, painted interior/exterior, updated existing cabinets in kitchen and bathrooms, and updated light fixtures/switches throughout. Additionally, we cleared the back yard and installed a new fence.

What was the outcome?

We sold the house to an FHA Buyer in a little less than 100 days total! We profited $43,500 after paying $21,000 in renovations, Closing cost $5,000 and paying our private investors $5,500.

Lessons learned? Challenges?

Always treat your clients like gold and they will come back and tell others about your services!

Investment Info:

Townhouse fix & flip investment.

Purchase price: $84,000
Cash invested: $10,300

Lynn Haven, FL 3 Bdr/2Ba 1,050 Sqft Townhouse Flip

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

Low housing supply in our local area was a big factor.

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

It was a deal we gained from marketing to off market homeowners.

How did you finance this deal?

Cold Calling

How did you add value to the deal?

Complete renovation

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

I worked with my normal passive investors to fund a large amount of the renovation and acquisition cost.

Great overview! 8% cash on cash , 15-20% IRR, with a 5 Yr hold period seems be on par these days!

Take a look at local credit unions. They love to invest in their back yard and their underwriting/approval is usually straightforward since they keep their loans in house. My experience has been superb dealing with my local credit union. Additionally, they had no seasoning period on my BRRRRs, order a new appraisal and 80% LTV on the Refinance and close in less than 30 days. This was in the Panama City, FL market.

Given what you provided, You can go all in and purchase it or bring in a JV to lower your risk exposure. I highly recommend a local credit union for your purchase due to their ability to provide great lending terms and straight forward underwriting. You will be able to leverage that relationship for other future deals if you chose to stay in that market.

Investment Info:

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

Purchase price: $1,050,000
Cash invested: $230,000

Value Add 18 Unit Apartment via Syndication of $95k of the down payment. Appraised at $1.24M before closing

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

I attended a Jake and Gino multifamily event back in Oct 2018 . It opened my eyes to how close I was to making the transition from single family investments to multifamily. I found this deal 45 days later and submitted my LOI shortly after!

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

I found it on MLS and reached out to the broker to walk it before submitting my offer. It had an open insurance claim which we assumed. Additionally, we requested the buyer to repair an active water leak prior to closing and provide $25,000 in concessions to cover expenses not covered by insurance.

How did you finance this deal?

I did a syndication hybrid model. I raised $95k in 2nd position notes at 7% cash on cash return per year for 2 yrs with a $30,000 equity share at the refinance milestone. It works out to a 17% IRR over the two years. I maintained 78% equity and the remaining 22% is held by 2 other friends who invested.

How did you add value to the deal?

We will add value by repairing 4 units damaged by hurricane Michael and increase the NOI by

What was the outcome?

We are still executing the business plan.

Lessons learned? Challenges?

I self managed for 5 months and learned alot working with my tenants through COVID. However, I was more than happy to hand the keys off to my new property management company!

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

Definitley leverage local credit unions for commercial projects less than $5M. Having solid relationships with them is extremely critical to having a strong lending partner with low fees and great terms. Credit unions keep their loans in house and have alot of flexibility in their lending products.

I know I'm late, but I have been using them since  2019. I recently was moved into their planning program after four completed projects with them. I have used them in the Panama City, FL area.