All Forum Posts by: John Doss

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $93,000
Cash invested: $53,600

This property was being sold by a wholesaler near the Greensboro coliseum. It was owner-occupied but hadn't been updated in at least 40-50 years. The floors also were very uneven - indicative of some joist/support issues underneath. It had poorly taken phone-photos on the MLS so it was passed over by most retail consumers. It provided a great opportunity for us to go ahead and purchase it under listing price.

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

This property needed a good amount of work and it was poorly marketed which is the perfect mix for a good deal. We also had the another property under contract at the time so we were looking for something else that was around 100,000 or less purchase price.

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

We found this deal on the MLS and negotiated a bit with the wholesaler that was working the deal to get it 7,000 under list price.

How did you finance this deal?

We financed this with a conventional fixed-rate 30 year loan.

How did you add value to the deal?

We did a total remodel on this property. We had the roof replaced, new insulation in the attic/crawlspace, new bathroom, kitchen cabinets, windows, floors, paint, and we had the house jacked up and reinforced where several joists had failed causing the floor to slope.

What was the outcome?

We were able to successfully rehab and turn this house into a long-term rental.

Lessons learned? Challenges?

We have a roofer that we use for all of our roofs. However, he also does total remodels for other investors. We decided to let them do some of the joist work underneath. They are fast and they are cheap but they do not have the highest quality workmanship. We ended up having our main contractor/carpenter come behind after them to fix the shoddy work they did underneath the house.

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

Lender - Guaranteed Rate

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $117,000
Cash invested: $63,400

This is a 3/1.5 house in the Glenwood neighborhood of Greensboro. When we first saw it, the previous landlord had done a lipstick remodel on it and you could tell they tried to cover up certain issues. For instance putting new LVP over soft, rotten subfloor. However, because of the location and proximity to the university, I felt that it was a good investment.

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

The house is located in an area that is up and coming due to its proximity to the university (UNCG) and I thought it would be a great opportunity to rent to students at my alma mater.

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

I found this deal on the MLS. At the time interest rates were still in the 3-4% range. We were able to offer about $7,000 over listing price without it really affecting our monthly mortgage payment. We also put up a good amount of due diligence and earnest money to secure the deal.

How did you finance this deal?

This deal was financed through a conventional mortgage with a 20% down payment. This was the first deal where my family started to become more involved and put up a lot of the money for down payment and renovations. After witnessing the successes of my first deal, my parents wanted to get involved and build a rental portfolio to secure their retirement.

How did you add value to the deal?

We did a total remodel on this house. We added a mini-split HVAC (it was previously window units and baseboard heat), changed all windows, new roof, new siding, new plumbing, new light fixtures, new kitchen cabinets, total bathroom gut and remodel.

What was the outcome?

We were able to rent the house out to several graduate students at the local university for $1385/month. The mortgage payment is only $585 thanks to the 3.875% interest rate.

Lessons learned? Challenges?

In this deal I learned even more about remodeling, working with contractors and the importance of good negotiations during the due diligence period of a purchase. There was a tree that had grown in the foundation which caused significant damage to the foundation wall. We were able to have the sellers pay for the $4,000 repair which helped to offset some of our expenses.

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

Kelly Irvin - realtor
RJ Meyerhoffer - lender

Investment Info:

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

Purchase price: $310,000
Cash invested: $90,000

The house is situated in Sunset Hills which is an affluent neighborhood in the heart of Greensboro. The house sits approximately 2 blocks from the local university and a few minutes from downtown. The location is prime and the property has already appreciated around 30-35% since purchased. This can be contributed to sweat equity and market conditions in the Triad area.

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

This was the perfect deal to get started in real estate investing - a house-hack in a duplex, in an affluent neighborhood which left room to add sweat equity, appreciation, and plenty of cashflow by renting out the rooms.

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

The deal was brought to me by Jason Coleman, a local investor-agent and contributor to the BP forums.

How did you finance this deal?

It was financed with an owner-occupied conventional loan with a 5% down payment.

How did you add value to the deal?

We did a total remodel on the house. New floors, new insulation, updated the kitchen, new bathroom vanities, new light fixtures, new HVAC and paint throughout.

What was the outcome?

It is a duplex with a unit upstairs and a unit downstairs. Each unit is 3/1 with a kitchen. I currently live in one of the bedrooms and rent out the other 5 in the house. The rent per room is $615 ($750 if there's a couple). Everyone living there is a mix of young professionals, students, or young adults just getting started in life away from home.

Lessons learned? Challenges?

This house hack was my first introduction into real estate investing. After starting the remodel I ran into multiple issues - active termites, mold that had spread through half the bottom floor, bad HVAC, electrical wiring issues. It was stressful at times but in the end, I learned a lot about remodeling and working with contractors.

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

Jason Coleman - agent
RJ Meyerhoffer - lender

He has signed the lease, but I haven’t signed it yet. I am asking him today for clarification. @Nathan Gesner that would be my concern - that he may be using it for some potential illegal activity.

And as far as I know, his wife and him still have the primary residence residence in Chicago. He said he just needs a place to stay for a few weekends while he’s traveling in between the places.

Typically I like to do certified funds for the first month rent and security deposit but I am not sure how to do that when they are signing virtually, aside from having it sent via snail mail.

Hello BP!

I just signed the lease with a tenant today. We signed via zoom because he is out of state. Here is the back story:

I do room rentals near UNCG in Greensboro, NC. I am also living in one of the rooms at the property that I am leasing out. The wife of the tenant called me a few days ago, looking for a place for her husband to stay in Greensboro, NC. She said he's a truck driver that is constantly delivering between Greensboro, NC and Chicago, IL. And said that he needs a place to stay on the weekends maybe a few days out of the month. So I had them fill out the application via avail. Background and credit check seemed good. The only thing that was a flag was that he had an eviction judgement against him at his current residence. I asked him about it and he explained the situation and said he caught up and settled the case. He is still living at that same residence and has been there for the past 8 years.

I accepted his application last night and today we did the lease signing. He wanted the lease to start as soon as possible and last for 4 months. While we were doing the lease signing on zoom, he said a few things that seemed a little strange to me. He said he would be there in 3-4 weeks but wanted to go ahead and set up his mail to be delivered to my house. He said it would be things like bank and other bills - but I have my suspicion. Why set the lease to start tomorrow if he wont be utilizing the room for another 3-4 weeks? It seems like he just wants a place to send the mail. And he also asked several times how the mail situation works and wanted to make sure none of the other roommates will touch his mail. I told him no problem, I'll hold onto it and give it to you when you arrive.

The whole situation seems quite odd to me. Pay $605 a month for a room but only use it a few times out of the month. But at the same time, receive all your mail at the property. He has signed the lease and has initiated ACH payment for first month rent and security deposit. I have not signed the lease yet and I am wondering if I should back out now and return his money when it comes through or if I can possibly cancel it? Or if I should just continue business as normal. I saw him and his wife on zoom and they seem like normal people, but it is just a very strange situation and I don't fully understand it.

@Dave Poeppelmeier

That sounds good. The company comes into play in the case of a student who doesn’t have someone who can co-sign. But I see what you’re saying. This is all new to me so I’m trying to learn as much as possible.

It seems like a legitimate company that eliminates a lot of the hassle of requiring guarantor/co-signer and minimizes the risk for student housing. They are a nation wide company. I'm surprised there's not anything about this on BiggerPockets yet. Here is an interview with one of the company's executives. 

Interview with Leap executive

Hello BP! Currently in the process of purchasing my first house hack (a duplex) near the local university and plan to rent out by the room. I expect my main target demographic to be students/young professionals. In this situation, obviously most students wouldn't meet the income requirements to pass the screening. However, I was digging around and found this guarantor/co-signer service that a lot of the local student housing apartment complexes utilize to rent to students that would otherwise not qualify.

The company is called Leap (https://www.leapeasy.com/landl...). On their site, they assert that they will act as the applicant's co-signer/guarantor for a fee (that is paid by the applicant). Once approved, the tenant pays Leap and then Leap sends the landlord the rent check every month. They claim that if the tenant defaults on payments, they will continue to pay the rent, and will even cover a portion of the legal fees for an eviction. They also claim to provide free marketing by featuring the property on their direct-to-consumer marketing platform. 

After a quick search of the forums, I didn't really see much info on services like these. What is everyone's opinion? Too good to be true? Or is this something that could be very useful to utilize?

TLDR: The company assumes the risk of renting to tenants that would otherwise not qualify or meet basic screening standards. The expense of the service is placed on the applicant. Landlord also receives free marketing of the property on their site.

@Kristopher Kyzar

Thanks. Yea the tax is pretty high on that house, its coming in at $3856 per year.

Do you guys think its wise to not include utilities in these analyses? I know with a SFH its easy to just have your tenants pay for the utilities. But in the case where people are renting by room, how is the best way to do that? Would the landlord pay for it then divide it up by the number of rooms and bill the tenants each month?