All Forum Posts by: Timothy Mitchell

Hey BP! So this is a Fannie Mae foreclosure where all offers were due this morning. I submitted a cash offer for the list price of 127k with 5% earnest money to close in 30 days. This Property is being sold as-is. Comps in the area are floating around the ARV. Rents are comparable for updated units close by as well. Hospital and Medical Tech Park within 1 mile, Interstate within 1 mile.

This property is unoccupied and winterized with notice of ice damage to plumbing.

Heat is FHW Baseboard, 2 Boilers, 2 Oil Tanks and 2 HW storage to be removed. All equipment and materials need to be removed, they are too old and not in working order.

There is knob and tube present in the basement.

With those 2 exceptions there seems to be no other major issues discovered as of yet. 

Both Units are dated and will need new kitchen appliances, cabinets, countertops, bathrooms, floors, paint, the usual. Windows and egress look newer and efficient. Exterior is clapboard that will need some scraping and painting. 

Bulkhead will need to be sealed and a sump pump put in place. Roof looks great and attic is nicely ventilated but could use some more insulation. 

This is mostly a forced equity/sweat equity deal, hiring on for the utility projects.

Let me know what you think of this deal and numbers. Any questions or comments would be greatly appreciated. Feel free to reach out to me directly as well.

Thanks!

-Tim

View report

*This link comes directly from our calculators, based on information input by the member who posted.

Off market multifamily portfolio in East Boston.
Jefferies Point, Orient Heights, Central near Maverick T-stop.
14 properties consisting of 42+ units.
Great Value Add opportunity here with low vacancy AND portfolio price is negotiable.
Seller is motivated and willing to separate properties.
Up and coming neighborhoods close to medical tech companies and schools.

Feel free to reach out to me on BP or contact me at [email protected] for further details.

Hey @Dario Furman I saved the images and had better luck.

Looks like your CapEx does not increase annually after year 2, adjusting with your PGR.

PM % is too High

Debt Service and Expenses are too High compared to Revenue

Negative Cash Flow

I think maybe the deal itself is wrong. The numbers might work on a less passive basis, perhaps self managing and landscaping, owner occupied, more skin in the deal etc...

Feel free to reach out and connect with me, I'm in a popular New England market where the numbers might work more favorably in small MF's. 

@Maxwell Dowd

I did, It was after 210 days and 6 months of payments following FHA guidelines. The Refi was a FHA Streamline Refi @ around 95% LTV, not a FHA Cash Out Refi which I believe required 20 % equity.

Investment Info:

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

Purchase price: $376,000
Cash invested: $20,000

4 Unit found on the MLS.
After acquisition:
Utilities were separated and sub metered for each unit.
Rents were increased to market value.
Minor repairs were made.
Annual Leases were initiated.
After 6 months property was refinanced with a Lower Rate.
Property is now at a 24% ROI

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

I was looking for a deal that would provide steady long term cash flow, required minimum conversion, and in a relatively stable market. Separate utilities or at least a reasonable way to separate to lower expense and increase revenue was necessary for this deal.

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

I found this deal on the MLS. My initial offer was denied. We settled on $376,000 which was $6,000 above the listing price with the closing costs paid by the seller.

How did you finance this deal?

I financed this deal with 3.5 down at 4.625, refinancing after 6 months to a rate of 3.5

How did you add value to the deal?

This property required decreasing expenses and increasing income.
That included separating utilities and including them in the new leases for each unit which also contained increased rent increasing at 4% annually as well.

What was the outcome?

The outcome was a cash flowing property with a 24% ROI after all expenses and projections.

Lessons learned? Challenges?

The biggest lesson of all I learned on this property was learning how to just pull the trigger.
Due diligence is important and so is having a strong network of professionals that know more than you do!
DOING the deal was important for me to learn exactly what I need to improve on moving forward in Real Estate Investing. I look forward to many more in the future.

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

I would recommend Sean Pinette, an agent of Harborview Properties. I consider Sean a great friend in the beginning of my Real Estate Journey and a fantastic representation of Harborview Properties.
I would recommend Jay Joyce over at Stonecoast Mortgage. Jay was able to help me navigate the sometimes confusing world of Real Estate financing and terms that go with it. I have a much better understanding on Real Estate thanks to him and Stonecoast Mortgage.

Hello BP! 

My name is Timothy Mitchell and I'm a new-ish investor and member to the Bigger Pockets Forums. I have been a Portland resident since moving up here from Long Island NY in 08. 

I purchased a 4 Unit in Westbrook last year in the path of progression for Portland and I'm ready to begin a few more! 

 I look forward to meeting new people invested in the growth of Portland and its surrounding areas and talking RE.

Thanks!

Tim