Closing my first deal tomorrow.

41 Replies

Thanks to the help of @Michael Noto myself and my partner are closing on our first property in New Britain, CT tomorrow afternoon. This is in a good neighborhood, directly across from a school- a three family unit. This REO property does need some renovation, but it looks to be in surprisingly good shape. I will take photo's of the units and progress as we go.

@William Collins

congratulations. Hope all goes well tomorrow.

Do you have the numbers to share?

Best of luck!

Here are some numbers on the deal.  It is a triplex with 3- 2br units.  Washer dryer hook up  in 2.   Acquiring at 100,500,  estimated rents are 950-1000 for units 1 and 2- unit 3 will be 800.  After repair comps are 180,000 when fully rented.  Estimated repairs are 20,000 + a roof inspection/repair. 

Goal is to refinance out and keep it long term as a buy and hold.

Looks like a good deal. Congrats!

@William Collins

 Congrats!!  I am a fellow multi family investor in NB and would love to see a progress thread for your reno.  Keep in touch and welcome to town.  :)

@William Collins Although this was Bill's first multi-family purchase he went into the process with a very well laid out plan and executed it perfectly.  Thanks for the shout out Bill and you guys are awesome to work with.  Why?

It was my pleasure to assist Bill and his partner where needed because they did a great job of identifying specifically what they wanted in an investment property and finding one that fit their investment strategy.  They had their infrastructure in place and were ready to pounce on something that fit into their strategy and did so.

In a competitive market being ready to act and knowing what you are looking for becomes paramount and due to their upfront research on the market they recognized a good deal, in a good area and I was happy to help them along the way.  

I could go on forever about investors and what they need to do to be prepared to jump on an opportunity when it presents itself like Bill did, but that could be a book to be honest and I don't want to bore anyone.

Yes, they did find this deal on the MLS here in Connecticut and there are properties that fit the newly coined "BRRR" strategy here in CT which is what Bill hopes to do with this property as he outlined.

Medium rzt hc 6483Michael Noto, SalCal Real Estate Connections | [email protected] | 860‑384‑7570 | https://www.zillow.com/profile/Mike-Noto/ | CT Agent # RES.0799665

Congrats, @William Collins and kudos to @Michael Noto ! Sounds like a good example of preparation meeting opportunity all the way around. Good luck with the property!

So folks asked for a few pictures of the deal

First we have the stand layout.  This is a constructed to be multi family. The first two floors are living room, leading to a dining room. There is a wood paneling on 1 floor.  The wood floor is in need of some repairs, so we are going to level and put in vinyl planks throughout the unit.

The kitchens have solid cabinets in decent repair needing some refurbishment.  We are patching, priming and painting them.  All counters are being replaced.

The first two floors have garbage disposals and dishwashers.  We are removing the garbage disposals automatically.

The bathrooms need some updating without a doubt.  We are looking at installing vent fan's hardwired to the light switch and replacing the windows (in the shower) with glass block.  The tub will get reglazed on both floors, all other bathroom fixtures get replaced.

Each of the first two floors has a washer/dryer room, and two bedroom similar to this one, basic room's, good light- bad flooring  and walls.

Here comes the fun part: all three unit's are fully split out- electric, and gas hook up. Two of three water heater's appear to be salvagable. One furnace works fine, the second needs repair's, and the boiler for the third floor can't be tested yet. This was a REO- so there is copper rip out, but not all the copper was removed. We are looking at some plumbing costs, and hvac repairs.

I will keep you updated as we progress- we are mid demo now on things that need to get removed.

Congrats!

One down and MANY more to go!

It certainly looks like you will do well with this 3 family.  Why are you replacing the bathroom window with  solid glass Brick and how much does that cost?  I remember when we bought   coop a long time ago and the bathroom window frame and  apron was all water damaged.  We had the sill and the area cut out and replaced it with a Corian window sill and Corian apron and that worked  well for us.  

Actually your renovation estimate of $20,000 seems low.  Do you think you can do all that renovation for that price?  What will the cost of the Roof repair come to?  Are you doing any of the work yourselves?  Is reglazing the tub the best approach, rather then replacing it?

Good luck with this project.  It sounds Good.

@Barbara G. The renovation inside is running well so far.  The outlier is the plumbing costs for the copper ripped out. Currently the costs for the cosmetic portions looks to be in line with 12 thousand, as I have a really affordable handyman. If we can get that we can get to what we really desire to do which is getting the unit to fully rentable by June. 

This post has been removed.

Good luck with your closing tomorrow! 

Best wishes, 

Kevin Stormer 

Mortgage Consultant 

www.iheartloans.com 

HI William,

Are you keeping the paneling on the first floor?  Did you get a plumber's estimate?  Do you need an electrician or can the handi man do all the electrical?  Where in Conn are you doing this?  Do you think you can finish this by the end of May?  Its a real interesting project.  Can you get it Refinanced when you are finished with the Renovation and the Renting or do you have to wait for a period of time?  On Our project the Bank said they will  refinance  at 70% of the appraisal.  What percentage will your lender refinance of the appraised value?

BG

Paneling on the 1st floor will be painted, but kept- we did this at my mother's personal house and it looks pretty good.  I would say 95% of the electrical works is swap out's of switches/plates- so mostly the handyman.   This is in New Britain CT.  We do believe that we can get two of three units done by mid May, the third we are hoping by the end of may.  At this point the bank we are working with will refinance at 70% of appraised value once leased tenants are in place.  So the goal is with a 100,500 purchase price and recent comparables on the same street being 189,000 to get an appraisal of at least 180,00.  This leaves us with the budget we are trying to stick to of 20,000 (and 5 thousand buffer).

@William Collins

 Sounds like things are already moving along at a good pace.  I'm curious to see how the tub reglazing goes, I have heard that once a tub is reglazed you are limited on what types of cleaning products you can use, and that some common cleaners can damage the finish.  How are all the appliances looking?  Fingers crossed on the roof repairs and HVAC.  The refi plan sounds solid as well depending on what street you are on.  What school are you close to?

Did you use a hard money lender to buy this house and get rehab money?  Or is your partner the one funding the deal?

Great thread!

@William Collins ..Congrats!!!  

I inspected a 3 plex, but didn't pull the trigger, because of the numbers. SFR is my comfort, but entertaining multi.

@William Collins

What a great project. Good to know that deals can be found on the MLS. Can you please share the original asking price and how many days it was on the market before you made your offer?

Sounds like it is coming along.  When was the house built?  Can we see a picture of the outside, the exterior of the house and of the bathrooms?  are the bathroom walls tiled? What are your plans for the bathroom wall and the tub surround?  Has the electrical been updated or do you have a fuse box?  Is the bank that is going to Refinance a local bank and have yiu had conversation with them about this renovation,  You  seem to be moving right along.  We are waiting to close on a duplex that also needs complete inside renovation so it is really interesting to me seeing your progress.  It sounds like you will have a better cash flow and and a higher appraisal then we will have 

@Kim Giannola  I reglazed a tub in my personal house, and it held up for 4 years before I replaced the tub- it could have held up longer. The nearest school is North End Elementary- which is literally right there.  Of the appliances- we have 2 decent fridges, 1 stove, 1 washer, and 2 dishwashers.  I will l need to get 1 fridge, 2 stoves, and washer dryer's as each unit has a washer/dryer per unit (though the third floors is in the basement).  I figure the timing is right for a Memorial day sales acquiring. 

@Barbara all units are separated boxes with breakers.   I am working with a bank and informed them of the plan before beginning.  as I have another business (a brewery) they already knew about me and were trying to get me as a customer.  Kind of like what @Brandon Turner mentioned in several podcasts, being the sought after customer and not the person who has no established credentials.   The current funds are from a partner, not hard money.

Here a picture of the other bath- we are going to be using surrounds.

Originally posted by @William Collins :

Here are some numbers on the deal.  It is a triplex with 3- 2br units.  Washer dryer hook up  in 2.   Acquiring at 100,500,  estimated rents are 950-1000 for units 1 and 2- unit 3 will be 800.  After repair comps are 180,000 when fully rented.  Estimated repairs are 20,000 + a roof inspection/repair. 

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William I was wondering what your costs were for Insurance, garbage, Water,  Electricity, Taxes, estimated mortgage (principal and interest), vacancy, on going maintenance all came to in total?   What do you estimate your cash flow to be?  Even if the renovation costs go up it still  looks like the cash flow should be good.  

Are you and your partner doing any work at the house, like painting or demolition?   Do you have to replace any appliances like refrigerators or dishwashers or Stoves?

@William Collins Thank you for posting, I will be following this. For my first investment I am thinking duplex or triplex. This is great!

This is exciting! Wishing you all the best and keep us posted on the progress!

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