All Forum Posts by: Venice Victory

Quote from @Nathan Gesner:

In a really good market, an investor can achieve 1% of the money invested. So $4 million invested would produce $40,000 monthly cash flow.

But there are many variables along the way.

 Thanks for your input. What's your take on current market conditions?

I like the 1% rule it's a conservative approach to underwriting and aligns with my risk mitigation techniques. I'm wondering if you think it's attainable today considering your emphasis on "a really good market"?

Quote from @Henry Clark:

OP.  I try to look up people’s background and posts before responding.  

You’re a project manager.  Would you answer your own question in a meeting?  

Does your question have anything to do with your first post?   If so run.  

Tell us what your REI strategy is. Then pose a contextual question or request. You will get great responses.

Yes I would answer my question and thank you for responding. 

Thankfully this is not related to my previous posts. Believe me if I could've run, I would have but I was born into that mess. That home belonged to my grandmother and was stuck in probate until I ushered it to finish line after a long 21 years. Thanks for the reminder that anything is possible after that journey. That property sold for $820K in that horrible condition.

I'll update my post to include an example of format, thanks for the suggestions. Would you consider answering what's your value of X?

I would spend $X today to have access to $40K/month.

To answer your question, my real estate strategy is buy & hold with a focus on value add strategies with impact investing.

Quote from @Jay Hinrichs:

explain please ?  or just explain as in a demand.

it this 40k gross or Net.

average rentals these days produce either negative cash flow or 100 to 200 to 500 a month positive depends on how much you put down. if you pay cash much higher.

but lets do average 200 month positive and lets say you meant to ask NET cash flow to live on. then you need to take 40k divide by 200.00 and there you go you need 200 doors . Pretty easy now lets say the doors are 100k to 300k each.. again simple math 100k X 200 doors is 20 million and 300k X 200 doors is 50 million.. 

I appreciate your thoughtful breakdown! To clarify, this is about net cash flow, not gross. You're absolutely right—positive cash flow from rentals can vary significantly depending on factors like property costs, financing, and the ever changing market conditions.

For real estate the challenge isn't just accumulating properties but creating a framework that builds net worth more strategically and sustainably.

Cash Flow can be generated in many ways, my intention was to better understand the investor mindset and their approach, if they wanted to share.

Based on your example, if using conservative calculations at $100K/door, you would pay $20M for access to $40K/month. 

Please share if this number would change due to the volatile market conditions and how you would mitigate the risk.

Thank you for your willingness to share and explain your perspective.

That's it, that is the question!

How much would you spend today for a monthly cash flow of $40k? Explain.

Quote from @Venice Victory:

Triple Decker - Complete Gut Rehab

The numbers never lie and the description is very interesting since this is probate matter. I am interested in learning what is the most you would pay for this property? More importantly why?

In my opinion, considering the condition and all the risk that comes along with a property built in 1910 - $500K would be my offer.

There are deed restrictions that prevents expansion and optimal use of the yard.

Rehab costs for a full gut rehab approximately $650K conservatively, assuming there are no structural issues. Worst case scenario rehab costs is hard to account for since a structural damage can warrant for a demolition. 

I would love to know your thoughts, ideas and suggestions. 

Deal or No Deal??!

 20 Year Probate Horror Story

Quote from @Lien Vuong:

Most triple deckers in Boston are built in the 1910 but it has been my experience that they're very well built with even granite stone basements and very large footprint. I know this street well and there's other 3Fs that have already sold for $1.1-1.3mm in modest conditions so you have the right area down. Even with gut renovations and $/sf renovation figures, you're likely looking at around $100-125/sf for renovations which lands you at $525,000 for a large renovation of the unit so I think your $650k is too high. This zip code would not necessitate a very high end reno but rather slightly above grade for family renters. 

The thing that is a red flag for me is the deed restriction where it is limiting your property's use and conversion in the future into condos etc. That in itself, will limit your use of the property and parcel.

Your numbers are absolutely on 🎯 This deal hold a lot of sentimental value but I certainly refuse to overpay!

Do you have any suggestions on how to best leverage the owners equity & expenses owed, so that she can buyout her heirs? I have a hard money lender to complete the rehab. In essence I'd like to partner with my mom once the home is in her name. 

The courts suggested she find alternate housing and she is pre-approved for $400k but as you know that will not be happening in the Boston market. My mom is also 65 and I'm against the idea of her taking out a 30 year mortgage. 

Any thoughts, ideas or suggestions?

Quote from @Jonathan Bombaci:

However much it’s worth assuming it fits your strategy and you can make some money. 

We recently just paid $675,000 "CASH" for a 3 family in Quincy. It needs about $50,000 of work but ARV is over $900k. We'll get it vacant and ready for FHA/VA buyers then flip it on MLS. It should be a good deal for a Househacker looking to live for free, or at a discount, in Quincy.

So both prices work for the same property but the value changes based on the strategy and condition.

How much is it worth when your renovation is complete?

Do you plan to flip it? If so you’ll want to make at least 20-30% profit. 

Do you plan to refinance it and hold it long term? If so then the ARV needs to support what you put into it and it'll need to cashflow when rented out.

Or do you have some other strategy in mind? 

Best,

Jon

Since this is my grandmothers home, the original plan is to get it transferred to my mom's name so that we can proceed with the value add portion of the transaction. The courts forced us to market (although a publication was never filed) and now there is a buyer at $870k😮 "As is" & I don't understand why someone would offer that much. Do you?

Even with my mom's equity ownership, expenses owed, and Amazing credit she was unable to secure traditional financing. I also don't understand, especially since the home will pay for itself once stabilized. Do you know why that is? The plan after the rehab is to cash out refinance at cost. ARV around $1.3M at best

Any ideas or suggestions on how you would bring this deal home after 20 years?

Quote from @Tom Wagner:

To me the value hinges on the value of the rear lot. If you are able to sell individually or build a triplex in that area it has significant value, and if not I would pass on this property at ~any price. Having done a full-gut rehab of a fourplex previously I have virtually zero interest in doing that again without significant ($200k+) in day one equity upon stabilization.

Thanks for your reply and experience based insight. There are deed restrictions on the backlog, expansion is not easily attainable. I also appreciate the $200k threshold supplied. Interestingly this is a probate matter and the heir who filed the petition is being forced out. She has over $400k in documented expenses + 25% equity ownership. Any thoughts on how to best advocate for a redistribution of equity? Or how to maximize the amount of expenses she's able to claim? Our lawyer is not that helpful but has ALL 20 years of hard copy paper work.

Triple Decker - Complete Gut Rehab

The numbers never lie and the description is very interesting since this is probate matter. I am interested in learning what is the most you would pay for this property? More importantly why?

In my opinion, considering the condition and all the risk that comes along with a property built in 1910 - $500K would be my offer.

There are deed restrictions that prevents expansion and optimal use of the yard.

Rehab costs for a full gut rehab approximately $650K conservatively, assuming there are no structural issues. Worst case scenario rehab costs is hard to account for since a structural damage can warrant for a demolition. 

I would love to know your thoughts, ideas and suggestions. 

Deal or No Deal??!