All Forum Posts by: Ugochukwu Opara

Hey @Adam Allen,

I think @Amit Saini nailed it right on the nail. I am currently doing a conversion as well which is why I clicked this to see if I can help. My conversion is a single-family home that is zoned RMI in Philadelphia which means I can use it as a multi-family by right. This is much more simple than what you are trying to do. Best of luck

This one depends on your resources but I recommend everyone get into rental properties.

Buy something that is completely run down and do the renovations.

Get it rented then cash-out refinance to get your funds back and pay back any more you borrowed (ie Hard Money). Then you rinse and repeat. I do this with small multi-family buildings 2-4 units, and it works well. However, I am picky with my selections because my goal for each building is to make $800+/m net in rental income. 

Sounds like a plan,

if the terms are right then sure.

I'll message you and we can take it from there.

 Hi M. Troy, what did you have in mind?

Investment Info:

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

Purchase price: $25,000
Cash invested: $13,000

Purchase $25,000
Rehab $80,000
Total $105,000

Rent $1887 (2+1 duplex)

How did you finance this deal?

Financed using a hard money loab

How did you add value to the deal?

Full rehab so brand new everything.

 Hey Jian,

I am self-managing right now. I only have 7 Units at the moment which isn't hard to manage at all. 

My goal is to hire out the management part in the future but right now I can handle it. I do budget for management when I run my numbers before buying.

So for this deal, I was going to still make around $800/m if I hired a management company.

Cheers

 Glad I could help. Thanks for your questions. I am sure others will benefit from you asking.

Cheers

 Yup, absolutely.

I had to have tenants in place and a debt service coverage ratio needed to be 1.25 or higher. Meaning is your mortgage is $1000 your rent needs to be $1250 minimum.

 The whole process took 6 months after settlement. Locking down the financing took all of 24 hours, just one phone call. I already had clients that were using the hard money lender I used for this transaction so I came in to open arms.

Rehab took me 3 months, and I started showing the property once the drywall was up so that cut down on the time it took to rent. We had tenants with signed leases before the rehab was even done. I would just send them picture updates as progress was made. Worked out well and this is what I normally do. The refinance took about 45 days. It cost me about more than 8k because I still had closing costs + 3.5% points total loan amount for hard money loan ($5320) so more like $16-20k to be safe. 

I held the hard money for a total of 6 months. @ $1520/m so $9120 in total. 

So a total of $30,000 roundabout. I got 15k back so 15k still left in the pot.

So, all in all, it cost me about 15k for this property. I don't live on my rental income so the money just builds up in a reserve account for repairs and whatnot. I got burned a few times with the contractors. Rehab was only supposed to take 2 months and HVAC guy went up on price by 10k which made central air unaffordable so that sucked but what can you do. 15k to own something worth 250k, with $75k in equity and $1000/m in cashflow, I am happy. I'll get better with the next deal. The goal is to be out of pocket nothing. The cash out should cover all monies out of pocket but hey, you win some and you learn some. 

I hope this has answered all your questions.  Thanks for asking.

 Hi Amina,

Feel free to message me and I'll let you know who I used. 

This was not my 1st rehab however I still got played by the contractor and ended up having to bring in other people to finish the job.

Cheers