All Forum Posts by: Tony Cimino

@Collin Schwartz

I used Erol Kinkaid with Equitable Bank. They did a desktop appraisal that I felt was a little low so I requested a full.

They were extremely easy to work with and knew exactly how everything needed to go. I was so impressed that I moved my business account to them.

@Anthony Gayden Peony Park in District 66.

Working on another deal right now. Lots of lowball vernal offers going out now, sight unseen. I have a friend who has started a letter campaign and if he can't close, he's going to kick it to me. My realtor is also keeping me in mind for things he can't sell on the MLS. But I am open to moving any/all deals right now!

Investment Info:

Single-family residence buy & hold investment in Omaha.

Purchase price: $85,000
Cash invested: $40,051
Sale price: $155,000

First BRRRR house!
Will rent for $1250 (low end)

Will Refinance at the beginning of the year, and should appraise at $150,000

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

Reading David Greene's BRRRR Book

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

Facebook Marketplace!

I figured it needed $20,000 in reno, and figured about $10,000 in holding/closing/Fees

How did you finance this deal?

Hard money lender. They would pay me 70% of the total ARV. They said the ARV was going to be $140,000 and only gave me $98,000, so I had to come with the rest. I bet on myself, and I won.

How did you add value to the deal?

Basement was unfinished, so we added drain tiles and a sump pump to keep it from flooding. Finished the basement to add about 550 sqft in the basement. Added a bathroom and bedroom in the basement and changed the house from a 2bd - 1bath, to a 3bd - 2bath. Tiled the upstairs bathroom, tiled the kitchen, new appliances, and refinished the wood floors.

What was the outcome?

Update With Final Numbers
Bought for $85,000
Closing, Holding, Rehab - $40,051
All in: 130,051
January 2020 Appraisal: $155,000
80% Cashout Refi (5/30ARM) = 124,000
Own the house for: $6,051
But also added $31,000 in equity

Rent: 1250 + 15 (pet rent) + $25 nonrefundable pet deposit ($300/12 = 25) = $1,290 per month
Yearly Rent: 1290*12 = $15,480
Yearly Mortgage: $10,750
15480-10750 = $4730 Per year
5% CapEx: 236.50
Cash Flow Per Year: $4,493.50
Cash Flow Per Month: $375.46

Lessons learned? Challenges?

Pay for a good GC upfront because it will cost you more money in the end.

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

Chad Blythe of Nebraska Reality really helped walk me through the process. This was a wholesale deal and so my agent did not get any money out of the deal, but I have bought 2 houses from Chad in the past, so we have a good relationship and he was a big asset.

I tried to add progress pictures, but they are rotated 90 degrees when I upload them for some reason.  Here are the progress pictures (description is wrong, my accounting was off by $3,000 in the IG post): www.instagram.com/p/B7oRaBCB2La/?igshid=m26bz4tk0frf

Investment Info:

Single-family residence buy & hold investment in Omaha.

Purchase price: $85,000
Cash invested: $40,051
Sale price: $155,000

First BRRRR house!
Will rent for $1250 (low end)

Will Refinance at the beginning of the year, and should appraise at $150,000

**Update With Final Numbers***
Bought for $85,000
Closing, Holding, Rehab - $40,051
All in: 130,051
January 2020 Appraisal: $155,000
80% Cashout Refi (5/30ARM) = 124,000
Own the house for: $6,051
But also added $31,000 in equity

Rent: 1250 + 15 (pet rent) + $25 nonrefundable pet deposit ($300/12 = 25) = $1,290 per month
Yearly Rent: 1290*12 = $15,480
Yearly Mortgage: $10,750
15480-10750 = $4730 Per year
5% CapEx: 236.50
Cash Flow Per Year: $4,493.50
Cash Flow Per Month: $375.46

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

Reading David Greene's BRRRR Book

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

Facebook Marketplace!

I figured it needed $20,000 in reno, and figured about $10,000 in holding/closing/Fees

How did you finance this deal?

Hard money lender. They would pay me 70% of the total ARV. They said the ARV was going to be $140,000 and only gave me $98,000, so I had to come with the rest. I bet on myself, and I won.

How did you add value to the deal?

Basement was unfinished, so we added drain tiles and a sump pump to keep it from flooding. Finished the basement to add about 550 sqft in the basement. Added a bathroom and bedroom in the basement and changed the house from a 2bd - 1bath, to a 3bd - 2bath. Tiled the upstairs bathroom, tiled the kitchen, new appliances, and refinished the wood floors.

What was the outcome?

I had to fire my first GC, which increased my holding costs by $5,000 and increased my reno by $5,000, and went $10,000 over budget. However; the appraisal came back higher than expected and I was able to cash out $124,000, while my all in costs were $130,051, and now own the house for $6,051 out of pocket, while increasing equity by $31,000

Lessons learned? Challenges?

Pay for a good GC upfront because it will cost you more money in the end.

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

Chad Blythe of Nebraska Reality really helped walk me through the process. This was a wholesale deal and so my agent did not get any money out of the deal, but I have bought 2 houses from Chad in the past, so we have a good relationship and he was a big asset.

Great job!

I am just coming back to this.  If you think you can fix up the exterior for $10,000 and be all in for $60,000, and comps come back at $80,000 with just those fixes, you don't have to add anything to the interior and continue to collect rent rent and refi.  

$80,000 *.75 = $60,000 loan

When they do move out, they will have paid down your principal, and property will increase in value over that time. You can then fix the interior for another $10,000, and if the ARV is at $95,000, you can then refinance again.

$95,000 * .75 = $71,250 - $60,000 - $10,000 = Walk away with $1250.

Youre actually in a great position!

1. You limit your holding costs because the person is paying the utilities and mortgage on the property.
2. While the BRRRR method is built for speed, this situation, you can take each project one at a time and the principal pays down and the home will appreciate.

3. Take care of the exterior first.  Start with the roof, and get it done quickly.  Explain to the contractor that when he starts it need to be done ASAP to keep a literal roof over the tenants head.

4. The tenant will appreciate that you are fixing it and wont have to.

5. When you start interior work, make sure water is running and toilets work.  If you need to pull the toilet to tile a bathroom for a few days, maybe pay for the tenants hotel.

6. If you want the tenant out, you can give them a 60-90 day notice which is plenty of time for them to get their things in order.

I use Erol Kinkaid at Equitable Bank.  Super flexible, very easy to work with, and has a lot of investors as clients, so he understands multiple investment strategies.

I have a local lender who will give me a 5/1 ARM on 80% of the LTV.

The only thing he needs is a lease to ensure "proof of funds." The lender takes the lease as a guarantee that the house will rent what the loan payments are. He is able to do this because it's a commercial loan and it is in an LLC. I hate ARM loans, but money is so cheap it's better for me to take more money out now and do another BRRRR than only get 75% on a typical 30 yr mortgage. If I'm 5 years mortgage rates rise a ton, I can always sell the property, or since I can refi into another 5/1 ARM.

If you don't have an LLC the local lenders I found will only give you 75% LTV.

I was at my property currently under renovation and started talking to the neighbor who said he was worried about a large walnut tree over his house. He showed me that carpenter ants had hollowed out the base.

About 2 years ago, I remembered that a local news story about someone stealing walnut trees because apparently the wood is very expensive.

I posted on a local buy/sell Facebook group and had about 5 people reach out to me.  3 of them did not work for any company, just wanted it.  I eliminated those people because I was afraid they wouldn’t be able to do it correctly.

One guy came out to the house and told me he would take that tree but wanted two other trees on the property as well.  I told him that he could take all 3 walnut trees, but I wanted 2 other trees removed as well.  He accepted.  So, I got 5 trees removed for free!

While I may have been able to make money off the trees, I wouldn’t have any idea on where to start, and this makes my property less of a risk.