opportunity you all wont believe!

opportunity you all wont believe!

Danielle Hammond

Marquette, MI · Member since 2015 · 93 posts · 12 votes

Ok!!! After reading a bunch of inspiring stories on here, my excitement level is through the roof. So I want to throw this out there and see what you all think. Like I have mentioned or you can find in my profile, I am new to this, and I have little money. (There I said it! Please dont run! :) )

So I have found a triplex in my little town for sale... ive been following it on zillow for about a year watching the price drop every month. Well this month it dropped $10,000. Seriously. I am having my future partner/contractor come look at it with me next week. But I want you all to see my possibilities. The home is big and beautiful. It needs a heating system/boiler. Im hoping the contractor can give me a good estimate on costs. The houseis partially renovated , I am assuming they ran out of funds. Winters up here are harsh... really harsh... the insulation/ roof / and heating system has to bein good condition and will need updated. Here are m, "Ive never done this before, but I feel like I know things" -thoughts :)

I will guess that I need a loan for $55,000.00 to get all three apartments up to date and livable nice condition, $25,000 for the house (unfricken real) and 30,000 for the boiler system and repairs. Repairs could be a lot less, im just throwing a safety number out there. I would lije to have a "just incase account with 2000 aside for emergency) The cost of living up here is very cheap (averages $600-700 for small single family homes in nice condition) This apartment will and has in the past rent out for -

1st floor, 3 bedroom - $500

2nd floor, 2 bedroom - $400

3rd story, 1 bedroom - $300

Again, just thoughts, might be raised and adjusted depending on the funds available to fix up the place. This is about what the last owner charged while it was not in such nice conditions. So this is $1200 a month (lets pretend they all rent out immediately) Lets also say I have to pay 12% interest. With this income the house could be paid off in under 7 years. I am debating if living on the 1st floor for a few years would benefit, that would be an extra $700 a month I normally pay put toward getting this paid down FAST.

Here is the catch. The bank will not give me a loan for this house, as it is not llivable. I am going to search for a private loan, or if you all have another idea??? I dont want to miss this opportunity!!! please tell me this is a great starting out property. I think it would be such a loow risk chance. I will attach more images!!!

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Most Popular Reply

Investor · Cleveland, OH · Member since 2015 · 39 posts · 14 votes

11y

As a side note, if you are checking out a property and don't actually own it yet, it might be a bad idea to attach any identifying information for that property. Someone with questionable moral habits may see the opportunity and try to take advantage.

See this reply in the discussion

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Danielle Hammond
OP
Marquette, MI · Member since 2015 · 93 posts · 12 votes
11y
Originally posted by @Mary Ann:

Originally posted by @Barbara G.:
This sounds good
The house is $25,000 You have estimated $55,000 for renovation so the total cost will be $80,000. So with your rent roll of $1,200 to $1,350 it looks like it will be an OK cash flow. It also sounds like once renovated rents can be higher? As you say you just have to get the money to Fund it. You have a contractor partner so how much cash can you each bring in?
Are you buying this from a local Bank? Can you sit down with them and see if they can or would offer you any kind of Personal loan on this?
I think your idea of Moving in is a good one. It certainly would helyes ip you get this whole thing together. Get the heat going and move in. It is getting warm right now. You say you could contribute $700.00 (your current rent) and that would help. Look at your credit card situation and see if there is anything you can do with that. Can Home Depot give you a $10,000 line of credit toward your building materials? What about Lowes line of credit for your building supplies? What can you borrow with Hard Money? What can you and your partner do with credit cards? How much sweat equity can you and your partner put in?
Good Luck.
This is excellent advice that can be applied to most creative financing situations, when time and money are the biggest challenges.
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Danielle Hammond
OP
Marquette, MI · Member since 2015 · 93 posts · 12 votes
11y
@maryann... I agree.. barbara is my fav. Advice giver !! :)
1 Reply
Danielle Hammond
OP
Marquette, MI · Member since 2015 · 93 posts · 12 votes
11y
then this is how the second and 3rd floor Could be turned into one big unit and still be nice...
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George Allen
Marietta, GA · Member since 2015 · 117 posts · 23 votes
11y
Thats way out there guy. Your far enough north there to send me some pasties. I like the Air force base. Depends on the size. You might want to check around there and see how housing works the AFB or any colleges. Actually go there and ask questions. I'm not a buyer in rural areas. Two few and far in bettween.
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Danielle Hammond
OP
Marquette, MI · Member since 2015 · 93 posts · 12 votes
11y
the second and first floor are a lot alike.. thus is first floor (the stinky unit-needs new carpet and possibly floors)
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Danielle Hammond
OP
Marquette, MI · Member since 2015 · 93 posts · 12 votes
11y
all new kitchen cupboards are in the garage...this is the worst unit... second floor is way nicer. Then there is also a new deck.. and a garage worth more than there total asking price lol. can u see why I love it yet?
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Danielle Hammond
OP
Marquette, MI · Member since 2015 · 93 posts · 12 votes
11y
Originally posted by @George Allen:

Thats way out there guy. Your far enough north there to send me some pasties. I like the Air force base. Depends on the size. You might want to check around there and see how housing works the AFB or any colleges. Actually go there and ask questions. I'm not a buyer in rural areas. Two few and far in bettween.
best damnpasties youll find. The AFB is closed... low income duplexes/meth labs... slumlords.. its extremely sad. Once the policeget it cleaned up I will probably get a few rentals out there.. but right now is bad.
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George Allen
Marietta, GA · Member since 2015 · 117 posts · 23 votes
11y
Originally posted by @Danielle Hammond:

Originally posted by @George Allen:
Thats way out there guy. Your far enough north there to send me some pasties. I like the Air force base. Depends on the size. You might want to check around there and see how housing works the AFB or any colleges. Actually go there and ask questions. I'm not a buyer in rural areas. Two few and far in bettween.
best damnpasties youll find. The AFB is closed... low income duplexes/meth labs... slumlords.. its extremely sad. Once the policeget it cleaned up I will probably get a few rentals out there.. but right now is bad.
lol. Your darn close Calumet copper country. No one made pasties better than Grandma you should know that. lol. I don't want to dampen you enthusiasm. However I am a city guy. Things move a lot slower in the rural areas. You may know of something around there I don't however you know the area better than I would that's for sure. Use your experience in the area if you have lived there for long. You probably know everything about it.
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Mark Hutchins
Professional · Peoria, IL · Member since 2015 · 30 posts · 10 votes
11y
I see one of the bathrooms showing a bath only (no shower head), is there another bath in that apartment that has one with a shower? Just from my own experience having showers is nice and allows you to charge more for rent. Having a bath only it limits the quality of renters you will have . Again just from my own personal experience.
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Danielle Hammond
OP
Marquette, MI · Member since 2015 · 93 posts · 12 votes
11y
Originally posted by @Mark Hutchins:

I see one of the bathrooms showing a bath only (no shower head), is there another bath in that apartment that has one with a shower? Just from my own experience having showers is nice and allows you to charge more for rent. Having a bath only it limits the quality of renters you will have . Again just from my own personal experience.
that is the tiny apartment... I would have hooked it up on the taller end... but the ceilings are all slanted.. it would have to have a shower hook up like the one in the other bathroom (pictured). Not so cheap like but my contractor would probably be able to do more with it. that apartmentwas an attic I think.. they didnt do a great job.. that is why id debate making the second floor and third floor one large unit... unsure... havent got thatdeep into it.. as I can not find a loan!!! Lol
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Wendell De Guzman
Investor · Chicago, IL · Member since 2013 · 2k+ posts · 1k+ votes
11y
Originally posted by @Danielle Hammond:I will guess that I need a loan for $55,000.00

Here is the catch. The bank will not give me a loan for this house, as it is not llivable. I am going to search for a private loan, or if you all have another idea??? I dont want to miss this opportunity!!! please tell me this is a great starting out property. I think it would be such a loow risk chance. I will attach more images!!!
You can get a HARD MONEY LOAN or REHAB LOAN first. Rehab lenders can lend you up to 80% of project cost up to a maximum of 65% of the After Repair Value.
Once you renovate the property and is now livable, you can do a CASH OUT REFINANCE with a conventional mortgage lender.
This is exactly what I explain in this video:
How You Can Buy 20 Houses With $20,000
Let us know how this goes.
0 Reply
Chris L.
Investor · New York, NY · Member since 2014 · 156 posts · 48 votes
11y
The numbers do sounds really good for that property. A few thoughts come to mind that could wipe out your profits:
Are there any liens on the property? ie tax liens?
Foundation issues? The scary thing about foundation issues is that when you try to fix them, it could lead to a ripple effect of other repairs that need to be done.
Buried oil tank? I'm not sure if in your area, sellers are required to remove them. In that process, the tank could leak and you're in a world of hurt paying for soil remediation.
Rental market? You sound like you're in the beginning stages of looking into rent rates in the area. What you will pay might not equal what others would pay. Call all the For Rent ads on Craigslist and ask how long the rooms have been vacant. Also ask if they've noticed any trends in the rental market. Or talk to agents. Demand could potentially be very different from what you think. And what a place is listed as for rent doesn't necessarily mean what it will end up being rented for. When asking people for money, you will give them more confidence in you if you can gauge how tight the market is.
History of mold? Even if you don't see it, that doesn't mean it's not there. Black mold is toxic and lenders such as FHA will not loan on those properties (not sure about 203k loans).
Best of luck to you, I hope everything works out and you are able to make this deal happen! Keep us posted!
0 Reply
Danielle Hammond
OP
Marquette, MI · Member since 2015 · 93 posts · 12 votes
11y
Originally posted by @Wendell De Guzman:

Originally posted by @Danielle Hammond:I will guess that I need a loan for $55,000.00

Here is the catch. The bank will not give me a loan for this house, as it is not llivable. I am going to search for a private loan, or if you all have another idea??? I dont want to miss this opportunity!!! please tell me this is a great starting out property. I think it would be such a loow risk chance. I will attach more images!!!
You can get a HARD MONEY LOAN or REHAB LOAN first. Rehab lenders can lend you up to 80% of project cost up to a maximum of 65% of the After Repair Value.
Once you renovate the property and is now livable, you can do a CASH OUT REFINANCE with a conventional mortgage lender.
This is exactly what I explain in this video:
How You Can Buy 20 Houses With $20,000
Let us know how this goes.
thank you for the link!! I will read tonight... the bank wont give me anything because of hospital bills in collections are killing my score. Im working on it tho :)
0 Reply
Danielle Hammond
OP
Marquette, MI · Member since 2015 · 93 posts · 12 votes
11y
Originally posted by @Chris L.:

The numbers do sounds really good for that property. A few thoughts come to mind that could wipe out your profits:
Are there any liens on the property? ie tax liens?
Foundation issues? The scary thing about foundation issues is that when you try to fix them, it could lead to a ripple effect of other repairs that need to be done.
Buried oil tank? I'm not sure if in your area, sellers are required to remove them. In that process, the tank could leak and you're in a world of hurt paying for soil remediation.
Rental market? You sound like you're in the beginning stages of looking into rent rates in the area. What you will pay might not equal what others would pay. Call all the For Rent ads on Craigslist and ask how long the rooms have been vacant. Also ask if they've noticed any trends in the rental market. Or talk to agents. Demand could potentially be very different from what you think. And what a place is listed as for rent doesn't necessarily mean what it will end up being rented for. When asking people for money, you will give them more confidence in you if you can gauge how tight the market is.
History of mold? Even if you don't see it, that doesn't mean it's not there. Black mold is toxic and lenders such as FHA will not loan on those properties (not sure about 203k loans).
Best of luck to you, I hope everything works out and you are able to make this deal happen! Keep us posted!
thank you for your reply! Foundation is good.My boyfriend is a mason, so thats all been checked. Mold has not been. I am waiting to have an inspector walk through. But so far none has been seen by my people. I know the market in my town probably better than anyone else.. I watch everything. I know who the competition is (not much) the biggest realtor/flipper/renter that owns ALOT up here is a slumlord that people are starting to hate for allowing all the drug lords out on the old AFB... he will slowly be pushed out or retired... his son will take over and he already has his dads bad reputation. There are a few others (friends mostly) with only a couple of small properties... we would work together and hopefully get rid of the slumlords making the pricing market so low with junk property. I literally know everyone in my town and what everyone has asked for in the past. This town is thriving in repairs.. rebuilds. New library new park. New police force. Right now might be low.. but it is.. and will raise. If there is onething I am sure of.. it is pricing. I will ask more if my funds for renovations are high enough to make this a beautiful safe place to live. And that is my goal . :)
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Barbara G.
Hartsdale, NY · Member since 2015 · 874 posts · 218 votes
11y
Can you work out a lease to own with the person that owns the property? Paying it off with your rentals? Can You give him $1,000 a month?
Could you pay him off in 5 years?
When its renovated go into the bank again and see if they will give you 70% of the new apparised value after the renovation?
There must be some way to do this. Won't the owner carry the mortgage for you, after all he is having a terrible time selling it.
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Barbara G.
Hartsdale, NY · Member since 2015 · 874 posts · 218 votes
11y
Hi Danniell
There is a blog called:
Rent-to-own Help!
29 posts by 16 users
This is from the sellers view but there might be some information here that you can use. Take a look at it ans see if anything could work for you?
Who owns this property?
Are they local people or is it from a bank?
Barbara
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Danielle Hammond
OP
Marquette, MI · Member since 2015 · 93 posts · 12 votes
11y
Originally posted by @Barbara G.:
Hi Danniell
There is a blog called:
Rent-to-own Help!
29 posts by 16 users
This is from the sellers view but there might be some information here that you can use. Take a look at it ans see if anything could work for you?
Who owns this property?
Are they local people or is it from a bank?
Barba
Its through a realtor and she wont tell me who owns.. rent to own would not cover the $12,000 in repairs for the boiler and bursted pipes.. it is not move in ready :/ (i have looked at and tried EVERYTHING. My only option is a private/HM loan)
0 Reply
Barbara G.
Hartsdale, NY · Member since 2015 · 874 posts · 218 votes
11y
I saw an old internet add for your house which was listed under Sale by owner
So I guess the owner was trying to sell it. Try looking at that FSBO and maybe you can find some information on the owner
Why don't you write up a proposal for the owner on owner financing and present it to the realtor. I think they are obligated to present any offer to the owner. So your offer would be in writing and they would be obligated to present it to the owners. You can even ask the head of the real estate agency to ask your realtor to present it? If they see it in writing it would frighten them not to present it.
Its a small town the neighbors must know who owns it. Just drive around and ask them. You can even get a reverse telephone listings and call everyone around there and someone will tell you.
If you can get the house livable you can move in with your dog and get the one, other great apartment renovated and have someone move in there.
About the boiler maybe you can get the boiler on a Home Depot credit card and work out a payment arrangement with a plumber. Maybe you can get 2 boilers and get something else for electric heat on the attic floor?
How many burst pipes are there and do you know where the leaks are coming from? Is the water turned off? I guess so
Maybe if the owner is desperate enough you can work out something with
them
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Danielle Hammond
OP
Marquette, MI · Member since 2015 · 93 posts · 12 votes
11y
Originally posted by @Barbara G.:

I saw an old internet add for your house which was listed under Sale by owner
So I guess the owner was trying to sell it. Try looking at that FSBO and maybe you can find some information on the owner
Why don't you write up a proposal for the owner on owner financing and present it to the realtor. I think they are obligated to present any offer to the owner. So your offer would be in writing and they would be obligated to present it to the owners. You can even ask the head of the real estate agency to ask your realtor to present it? If they see it in writing it would frighten them not to present it.
Its a small town the neighbors must know who owns it. Just drive around and ask them. You can even get a reverse telephone listings and call everyone around there and someone will tell you.
If you can get the house livable you can move in with your dog and get the one, other great apartment renovated and have someone move in there.
About the boiler maybe you can get the boiler on a Home Depot credit card and work out a payment arrangement with a plumber. Maybe you can get 2 boilers and get something else for electric heat on the attic floor?
How many burst pipes are there and do you know where the leaks are coming from? Is the water turned off? I guess so
Maybe if the owner is desperate enough you can work out something with
them
one boiler is for all three units. To get everything repaired (pipes and boiler installed) is $12,000.00 I have asked the realtor about financing and they will only finance the $25,000.00 for the property with 20percent down and good credit... same as a bank. I am going to try contacting her again on monday... I dont think they are going to work with me without cash in hand. It is priced to sell because they are trying to make a quick flip profit. I kniw everything about the original owner... they would have worked with me... the NEW owner just purchased for $5,000, on an auction I believe so no one knows anything about them... this happened like a month ago. There are no utilities... so thats more money. My sister may be able to purchase for me under her business name... but that wont help me refinance through a bank under my name when it is ready to go.It actually will not help me at all besides getting if off the market :/
I have bad credit and little money. It is starting to look like I will lose out on this and have to wait for another opportunity. A hard money loan would have worked wonderfully and would have got me started and on a good path, I am going to keep trying.
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Barbara G.
Hartsdale, NY · Member since 2015 · 874 posts · 218 votes
11y
Good Luck with everything. We are dog lovers here so you have some points with us.
Are you attending any Real Estate Meet Up Groups or Real Estate clubs out there? Someone there might do something with you.
The guy who purchased it for $5,000 might be interested in doing something!!!
Maybe your sister or another family member will partner with you.
1/2 of something is better then nothing.
You could GC it, Manage it and live in it
0 Reply
Barbara G.
Hartsdale, NY · Member since 2015 · 874 posts · 218 votes
11y
Good Luck with everything. We are dog lovers here so you have some points with us.
Are you attending any Real Estate Meet Up Groups or Real Estate clubs out there? Someone there might do something with you.
The guy who purchased it for $5,000 might be interested in doing something!!!
Maybe your sister or another family member will partner with you.
1/2 of something is better then nothing.
You could GC it, Manage it and live in it
Maybe the plumber would do all the boiler installations and burst pipe repairs for some %. What else do you have to do. How much is the painting and the 2 1/2 kitchens? Do youi need new electric Panels etc?
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