four closings in four weeks pt. 1

27 Replies

So my last post 7 building 20 units 18 months got a ton on support from the community. I didn't want to write what the actual numbers were until each closing actually went through. The first was yesterday on the six unit so i'll try and put as many details into this post as I can. Regardless of if this is a great deal a so/so deal or a bad deal which I certainly hope it's not lol, I hope it will help someone overcome the fear of there first deal. Or perhaps someone can learn from any mistakes I have maken. 

This building was found on craigslist as a six unit building for sale for 125k. I emailed the owner and asked about seller financing, he replied that it was something he would consider. I visited the property he actually agreed to a home inspection before I got it under contract. We agreed upon a purchase price of 110k, I was prepared to put down 25% on a land contract if need be but I certainly didn't want to put down that much. I asked him what he was using the money for and he needed 20k to put into a 12 unit he had just purchased.

I offered to put 20k down which ends up being about 18% which is less than I was actually prepared to put down and less than my bank would make me put down. We agreed upon a 7% interest rate and a 5 year term at which point if I couldn't secure financing he would continue to finance me. 

The total rents for the property are 3300 all six units are currently occupied. He provided the last year of gas and electric bills for me to review so I could figure out my actual numbers. With property management PITI, utilities, and cap ex I should be cash flowing about 900 a month. It may be slightly more but I put in a higher cap ex than normal because of a bigger building not completely gut rehabbed like my 3 duplexes etc.

I hope this info helps someone and if people are interested I will continue this for the next four weeks in new threads. Up next week 8/1 to be precise is the the four unit all one bedrooms! Wish me luck 12 units down 8 to go!

Great work @Philip Williams!

Thanks @Tim Leslie I had to miss the Chicago rea meeting last night over this which sucks would have loved to share the story with all of them! How the market in mn?

The market in MN is decent...I hear Chicago is the place to be . Do you do much investing in Chicago or just in crystal lake? 

A little in Chicago, mostly in Rockford IL which is about 90 miles away from the city. Crystal lake is too expensive the rents don't really justify the prices. I'll be taking a brief break from buying anything but after that I may explore the Chicago market more, or perhaps Milwaukee Wi I have been hearing great things about their market!

Just wanted to drop a quick Congrats to you!

@Tim Coppola   Thanks tim I am sure I will need a little bit of luck! @Joshua Dorkin Hey thanks I hope it turns out great, so I've finally caught up on all the podcast it only took me like four weeks any chance I can convince you and brandon to put out a couple a day? What am I going to do on my drives now!

@Philip Williams  

I have a two investors who I market for in Milwaukee and they are definitely having some pretty good success right now with tax lien lists and out of state absentee owners. 

@Philip Williams  - I don't think we have the stamina to do that . . . thanks for listening, though.  Just go through 'em again!

@Joshua Dorkin Oh i'm way ahead of you i've listened to all of them twice already lol. I tried downloading a couple new real estate podcasts and just wasn't the same you guys are the best. Quick question is there another bigger pockets summit planned anytime soon?


Milwaukee is a bad markets :)

I'm definitely inspired and look forward to  more posts from you. 

@Philip Williams  - Congrats!  That was a good reason to miss the Chicago Meetup!

There was actually some talk about Rockford.. I know @John Weidner  was talking about it and somebody else... but I can't seem to remember who

@Brie Schmidt Yeah the seller is financing us on this deal and he wanted to change the date so I was like sigh I guess lol. I suppose with the number of closing I have scheduled so close I was bound to miss some other activities!

@Philip Williams ...Congrats!!!

Side-note: Great idea on the seller financing part, that is something i have to familiarize myself with.

Great job with owner financing and cashflow. I don't know Chicago at all, is it in a decent neighborhood?

Congrats @Philip Williams  

As we've messaged, I like the cash flow #'s in Rockford but from what I've researched on the MLS, there is little appreciation opportunity. But the profit is all on the buy so if you buy right there is probably some opportunity. I was just up there last week assessing an 8 unit I plan on going back up next week and checking out more doors.

 @Paul Z.  is also investing there 

the neighborhood is so so not the best but not a war zone either. I am actually moving to Rockford to manage my properties and another investor friend of mine. @John Weidner  that is true but I'm not banking on appreciation for one and for two the current deal and my next three are all off mls properties. 

@Brie Schmidt  that was me talking about Rockford. :) 

I'm interested in this market and I agree with you as well @Philip Williams  about the opportunity in Rockford. If you buy right there is plenty of room for Cashflow. But it's going to be up to Rockford redevelopment plan to get lucky with any kind of real appreciation. I typically look at appreciation as the jelly on the peanut butter in most of the deals I consider. 

Just to confirm, you said you found these multi-unit props through off-market leads correct? 

@Paul Z. Hey paul to bad I had to miss it would have loved to talk to you about that market. Yes if you happen to get some appreciation in that market it would be very lucky! But if you buy at the right price you might not get appreciation per say but you may get the market just returning to a stable healthy price. I think we all know a duplex fully turnkey in any market for 50k that you can rent for 500 a unit is crazy lol. 

Yes I found these 4 current deals through off-market leads, one happened to be on Craigslist which is the six unit mentioned in this post. The next three deals one four unit and two duplexes were all by driving for dollars as I've heard it called. I wasn't the driver but I've let a few people in the area know that I want every address and number of for sale by owner sign that they see. I then call them find out the price talk to the owner etc.....I'm working on more direct mail marketing for that area after I move there which will be in about a month. So if you are looking for something in particular let me know the parameters and i'll see what I can do.

Congratulations.  You are doing excellent.  I wish I had those kind of deals here, but lately its 20% down money that is slowing me up so I shouldn't complain.

@Philip Williams  that sounds great! At our next meetup be sure to try and attend and we can definitely talk shop on this market.

Btw your mention of finding these deals on Craigslist got me to set aside about an hour today to do some "Craigslisting for Dollars." Some interesting stuff turned up. Lets just say I'll be doing it again tomorrow and will let you know the results in the near future!

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here