All Forum Posts by: Thomas Magill

Investment Info:

Single-family residence other investment.

Purchase price: $18,000
Cash invested: $497,000
Sale price: $846,000

These are three New Build homes right next to each other. The "Purchase price" was the land purchase and the cash invested was the construction costs. It breaks down to be about 6k per lot, and 165.6k per home. These numbers include everything, soft costs, tap fees (utilities), permit fees, etc.

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

I was traditionally a home flipper. The, I started looking at the numbers on new build properties and realized I could build these almost as fast as a flip and the profit margins were significantly more.

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

I was a private money lender on 3 New builds a year ago and that builder asked if I wanted to be a true partner on 4 more new builds. We found out we could subdivide those 4 lots into 7. These were the first 3 we completed.

How did you finance this deal?

I self financed the land and soft costs and used Lima One (institutional lender) to finance the construction.

How did you add value to the deal?

My mindset has always been to do a little extra than my competition. If my competition was putting in butcher block countertops, I was doing granite. Now, almost everyone does granite, but they do inserts for the bath and shower walls, so I'll do tile.
I feel that if the two properties were ever compared during a sale, or a rental, my property would be the preferred. In addition, I feel you get a more qualified buyer or renter if you use better materials.

What was the outcome?

It took about 3.5 months to build these 3 homes from when we broke ground. We got the properties under contract about 2 months before they were finished so the buyers could lock in their interest rates. At the time interest rates were climbing and we didn't know the peak. In addition, we were worried people would back out of the deal as a result of fear of the market correction. Ultimately we sold the properties for a good return.

Lessons learned? Challenges?

I could have done a better job of communicating with my partner on some of the decisions that were discussed throughout the process. I should have been more clear with the city on our intentions with the driveway designs. The material prices were at an all time high so it was a challenge to swallow that big pill while we were building. But, we made out well on the sale to capture some of the additional expenses.

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

My partner and I split up the responsibilities very well. He handled everything in the field and I did everything in the office. It played very well to our strengths and ultimately made the deal a success. We both got out GC licenses at the same time but we used his for the construction of these 3. His wife Melanie Elliott sold the homes for us.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $54,500
Cash invested: $60,000

The ability to find good deals in my typical buy box was getting pretty thin, so I had to increase the radius. This home was vacant for 3-5 year and needed a full renovation/reconfiguration. I removed a bedroom and added a bathroom to create a 3/2.

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

The potential upside due to the purchase price. This location was not on my radar but I was having trouble finding deals in other locations.

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

I found this deal through a wholesaler. I pulled comps in the area and tried to find something similar. Luckily a home sold on the same street a couple days before I closed over what I underwrote the deal for.

How did you finance this deal?

I borrowed money from a private money lender I found on BP.

How did you add value to the deal?

I reconfigured the floor plan to open up the space and added a bathroom.

What was the outcome?

I just finished the renovations and have listed the property for rent.

Lessons learned? Challenges?

I was originally wanted to flip this property, but once I realized that I didn't have any money in the deal and could cash flow the property I quickly changed my mind.

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

no

I'm looking for a lender who does mobile home refinancing. I purchased the mobile home in cash and would like to refinance my money out. Please let me know if there are any companies who provide this kind of lending.  

Thx Don!

Woodward Homes

Investment Info:

Condo fix & flip investment in New York City.

Purchase price: $250,000
Cash invested: $15,000
Sale price: $472,500

I purchased this condo to live in with the anticipation of holding on to it for as long as possible. Things changed when I slowly started to fall out of love with NYC. I started the renovations of this live in flip shortly after the purchase, and worked on it after getting home from work and on the weekends. I did most of the work myself and hired a couple plumbers and electricians after shocking myself a couple times.

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

It was in the best area (in my opinion) of New York City... the West Village. I initially wanted to keep it forever, but once I made the decision to go out on my own, I knew I need to sell it in order to start my company. So, this went from a live in flip to hold, to a live in flip to sell.

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

I found it on streeteasy.com and then contacted an agent to help me with the purchase. This was my first individual purchase of a property. I'd purchased one before this but it was an investment property within a partnership.

How did you finance this deal?

Traditional financing with 20% down and a 30 yr mortgage. I'd never purchased anything this way before and this was in 2012 just when we were coming out of the financial crisis, so lending was very tight. I had to get a 'gift' from my mom to show 2 years of liquidity in an account, in addition to a bunch of other requirements.

How did you add value to the deal?

A lot of sweat equity. I bought 15k worth of materials, and did most of the work myself. I worked in construction at the time and received some after market or damaged materials from some of my subcontractors.

What was the outcome?

I lived in the property for about 5 years. I ended up selling to a news anchor off market who owned 2 other units on the first floor. She was fantastic to work with and made the process very easy for me. She then leased the property back to me until I found another place to live in North Carolina.

Lessons learned? Challenges?

The biggest lesson learned, which I still have issue with sometimes, is to hire professional to do the right work. I tried to do everything and after a couple shocks and some water damage I learned my lesson.

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

No

Investment Info:

Single-family residence fix & flip investment in Gastonia.

Purchase price: $90,000
Cash invested: $74,273
Sale price: $221,000

I purchased this property directly from the owner of the property, but was introduced to him from a wholesaler friend of mine who could not make the deal work for her, so she stepped aside and let me work with the owner directly. I eventually gave her $1000 for her helping out. One of the stipulations for the purchase was that the owner's son (who grew up in the house) could come back and look at the property when it was complete. He loved it, and walked me through a lot of memories.

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

This is a great area to invest in Gastonia. Large lots with a lot of great foliage.

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

I found this deal through a wholesaler, but once she realized she couldn't make the deal work for her, she put me in touch with the seller directly.

How did you finance this deal?

I financed this deal with private money

How did you add value to the deal?

This was a very large renovation project that covered almost every part of the project. New kitchen, bathroom, added an owner's suite to the home, new plumbing and electrical, the HVAC worked but I had to replace the coil and duct, refinished floors.

What was the outcome?

This property took a lot of time to sell and eventually received a less than favorable appraisal, so it was a triple. Good money

Lessons learned? Challenges?

I had the opportunity to make the owner's suite much larger but neglected to because I thought the size fit within the context of the home. I was wrong. I should have made it a couple feet wider so the walk in closet didn't impede on the space so much and make it look like an awkward layout. I eventually decreased the depth of the master closet by 18" to open up the space a little. I'm not sure if this is what led to the sale but the sale happened shortly there after.

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

Just the buyers broker

Investment Info:

Single-family residence fix & flip investment in Belmont.

Purchase price: $150,000
Cash invested: $33,300
Sale price: $249,900

This was supposed to be a homerun deal, that ended up being a ground rule double. The company who we contracted to fix the well on the property ended up breaking it completely, so we had to install a completely new well that cost about 7k, so that was a huge chunk of the ol' profits we were not prepared to let go.

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

This area is one of the premiere locations to buy around Charlotte, NC. I was really excited about this deal. Unfortunately, I learned some good lessons. We went a little about our renovation budget in an effort to sell the house for more and because we had a lot of room in our numbers. When the project was nearing completion the well contractor broke the existing well that worked but did not produce a lot of water pressure.

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

I found this deal through direct mail marketing. The sellers mother had just passed away deeded the property to her daughter. The daughter was distraught over the passing of her mother so I negotiated with the daughter's husband. He was a great guy and very helpful throughout the process. He called me the day of closing and asked if we could cancel the closing and give me $5,000 to hand the deal back to him. But, I respectfully declined and moved forward with the deal.

How did you finance this deal?

I partnered with a buy and hold investor who was looking to learn about flips. I also partnered with him on a buy and hold property for the same reasons. He provided 50% of the deals funding through a private money investor and I self funded the rest.

How did you add value to the deal?

We added value through a lipstick plus renovation. We did some plumbing updates as well as a new kitchen and bathrooms.

What was the outcome?

We eventually sold the property to a lovely woman who took my real estate signs off the street because she didn't want anyone else to purchase the property. She gave the sign back to me after closing.

Lessons learned? Challenges?

We did all of the things right on this property and hired the right contractors, but unfortunately things happen that you cannot plan for. ie a well contractor who is 'well' regarded breaking your well...

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

No

Investment Info:

Condo buy & hold investment.

Purchase price: $180,000

This property I purchase to live when I moved from NYC to Charlotte. I went from living in 250 sq ft, to 800 sq ft and thought I was the richest man in Babylon. I lived in the property for almost 3 years and moved in with my pregnant GF. I tried to AirBnB the property, but it coincided with the Covid pandemic, so it went not where. Eventually I started getting people to rent it and then I had two tenants who wanted to continue their stay. So, I turned it into a traditional rental.

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

Originally this was my primary residence. I loved the interiors of this condo but it wasn't in the best location. Its in the middle of uptown Charlotte, but was right by an overpass. I kicked myself when I was about 6 months into living there because my car was broken into a couple times. Eventually, I moved and turned it into a STR, but due to Covid it was quickly turned into a traditional rental.

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

I found this through the MLS and negotiated through my broker.

How did you finance this deal?

I bought this property with traditional financing with 10% down. I had to purchase the property as a second home because I bought it before moving to Charlotte. I did this because I was leaving my W2 and did not know how to finance it otherwise.

How did you add value to the deal?

Not a lot of value add, but if I had to choose something it was switching from a STR to a traditional rental and going from collecting zero dollars in rent to collecting 1500.

What was the outcome?

I eventually put a tenant in place who was a hold over from AirBnB.

Lessons learned? Challenges?

Everything worked out on this property and it has appreciated about 50K over 4 years, as well as 4 years of principle pay down and depreciation. So, everything works out in the end, and if it hasn't worked out then its not the end.

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

Just my broker.

Investment Info:

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

Purchase price: $210,000
Cash invested: $20,000

Contributors:
Thomas Nance

The previous owner of this property was looking to cash out on this asset quickly to help fund a new build community. We purchased this property off the MLS in 2019 and replaced the roof and renovated the vacant unit of an inherited tenant who's lease expired. Within the first 3 months we only had 1 paying tenant and no one wanted to rent from us even at a reduced amount, but we were getting a lot of applications and people were paying the application fee whiched helped us pay our mortgage.

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

This was my first rental property purchase and I partnered with a seasoned investor to help me show the ways of the dragon. I found the property on the MLS and negotiated the sale, my partner brought the private money and we were closed within 10 Days.

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

I found the deal on the MLS from a seller who owned a considerable amount of small multifamily rentals. We negotiated a purchase price with the seller and were closed within 10 days. In addition, the NCDOT bought 5' of the front of our property to widen the road. I negotiated an amount that was beneficial for both of us, but it took a very long time to get the money for one reason or another.

How did you finance this deal?

My partner on the deal brought in private money and then we refinance through a traditional 30 year mortgage.

How did you add value to the deal?

We added a new roof replaced some HVACs and renovated the interiors of each unit.

What was the outcome?

We finished our refinance early this year and collected our NCDOT funds and the property is doing well

Lessons learned? Challenges?

The biggest lesson learned is to have reserves because you may be inheriting really bad tenants, so you'll need reserves to float you while things are getting worked out.

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

No