One Deal Done, But Still New

One Deal Done, But Still New

Rental Property Investor · Mechanicsburg, PA · Member since 2017 · 20 posts · 11 votes
Hello BP friends, I'm fairly new to both the professional and investor world. I graduated from college in spring 2016 and began working in medical device sales a few months later. Like many of you, I read a series of real estate books and fell into BP. I drive a lot, so I've listened to all the podcasts and decided that it was time to take action. In November 2017 I closed on a SFR property in Steelton, PA. It was an inexpensive first deal that i entered with a partner who has similar RE goals. We used a private loan to purchase and rehab the property, which needed minor work. It currently rents at a monthly rate 2.5x the purchase price - providing plenty of cash flow for our reserves. I believe we are all in at about 70% the ARV. I'm seeking to add to my personal investing via a house hack. I need to move towards Philadelphia in the coming months and currently seeking a 2-4 unit property that works for my FHA 203k loan. Side note, I have a great mortgage broker with experience in FHA loans and investing if anyone in the area needs help. I'm going to ask a lot of questions of experienced investors so I am happy to answer questions that I have an answer to. Looking forward to connecting with like-minded people! Nick
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Lender · Northbrook, IL · Member since 2014 · 198 posts · 50 votes
8y

Wow congratulations! I hope 2018 brings you further success!

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  • Rental Property Investor · Atlanta, GA · Member since 2017 · 126 posts · 110 votes
    8y
    Nice work! How did you find your partner? What do you both uniquely bring to the table, and how to you divide responsibilities?
  • Lender · Northbrook, IL · Member since 2014 · 198 posts · 50 votes
    8y

    Wow congratulations! I hope 2018 brings you further success!

  • Rental Property Investor · Mechanicsburg, PA · Member since 2017 · 20 posts · 11 votes
    8y
    Michael Ehmann Hi Michael, my partner is a friend that I've had since high school. When I started getting excited about investing I shared what I was reading and listening to with all my friends. This particular friend - now partner - was just as passionate and excited as I was. He has a family member who was willing to lend us the money. He also has a brother who is an attorney and accountant - so we were able to get free tax and legal advice when forming the LLC. I'm bringing hustle to the table. I was the one who found the deal, underwrote it, presented it to the lender, went to closing, managed contractors, and ultimately vetted our tenant. What kind of experience do you have? I know a few guys down in Atlanta. I heard the market has been blowing up. Nick
  • Rental Property Investor · Mechanicsburg, PA · Member since 2017 · 20 posts · 11 votes
    8y
    @vincentpace thanks! You as well. What do the terms look like on your real estate loans? I'm going to be hunting for deals as soon as I get to philly. It's always good to know lenders.
  • Real Estate Agent · Media, PA · Member since 2017 · 361 posts · 250 votes
    8y

    @Nick Hundertmark, welcome! Great work on your first deal. Depending on how close to Philadelphia you are planning to move, I may be able to help out. I operate in Delaware, Chester and Montgomery counties as well as Philly, and am very familiar with househacking, I am a househacker myself! 

  • Rental Property Investor · Mechanicsburg, PA · Member since 2017 · 20 posts · 11 votes
    8y
    John Knisely hi John, thank you. Can I message you my contact info? I'm looking for houses in those areas.
  • Real Estate Agent · Media, PA · Member since 2017 · 361 posts · 250 votes
    8y

    Sure thing! My email is in my signature as well.

  • Lender · Berkeley, CA · Member since 2017 · 1k+ posts · 549 votes
    8y
    Welcome and congrats. I wish I had the foresight at your age to have begun then, so kudos to you. You should consider joining the Philly REIA, DIG, or both. You can potentially House hack in Brewerytown, Strawberry Mansion or East Falls on the North Side. Hit me up if you have questions as I live In Fairmount/Brewerytown.
  • Rental Property Investor · Atlanta, GA · Member since 2017 · 126 posts · 110 votes
    8y

    @Nick Hundertmark, I'm in a similar career stage as you. I graduated December 2015 and started working fulltime that summer. I bought my first personal residence in May of this year by house-hacking a condo (bought a 2 bedroom and added on a 3rd bedroom, allowing the roommates to cover the mortgage, leaving me with a few hundred $$/month in HOA fees - not a perfect setup but better than the $1000 I was dropping in rent each month previously).

    I'm now looking to add my first pure investment property to my portfolio. Financing is the biggest hurdle for me because most of the savings I had went into my downpayment, so I'm rebuilding now. Most likely for my first deal I will partner with a family member or coworker who can help with the financing piece.

    But yeah, ATL is a pretty hot market now from what I understand, which presents its own challenges, too. Naturally, a lot of things are getting overpriced in certain areas, especially intown. From the deals I've been looking at, I've had better luck looking on the North side, closer to the 'burbs. There are a lot of cheaper properties in South Atlanta, which is pretty rough right now in some parts but is getting revitalized.

  • Trenton, NJ · Member since 2017 · 5 posts · 6 votes
    8y

    Hi Nick, congratulations! I am just about to close on my first multi-family property with a 203k in Philadelphia. I may need to float a question or two by your 203k mortgage contact in the future. I'm also interested in partnering up with intelligent investors for the future.

    Good luck!


    Dave Baer

  • Real Estate Agent · Alpharetta, GA · Member since 2017 · 85 posts · 30 votes
    8y

    @Nick Hundertmark - Welcome and congratulations on your early success. Sounds like you're off to a good start. I'm personal friends with a very high volume wholesaler in Philly if you want the referral. He's a great guy, down to earth, straight shooter and has access to tons of deals. In addition to the FHA 203K, you may want to look into a Fannie Mae Homestyle for larger renovation projects. Similar product but you can do as little as 5% down for your primary residence or 15% down for investment properties, up to 50% of the mortgage mount can be for renovations, so you can do major projects that require structural changes or additions. We actually just helped a client of ours house hack a duplex in town. $60K acquisition, $40K rehab, 2 units, 2 beds 1 bath each, all in at $100K. He bought 2 of these side by side. Lives in 1 unit and rents the other 3 units for $895, so he's generating $2,685 in revenue, expenses are $1,200 so he's living for FREE and netting $1,485.

  • Real Estate Agent · Alpharetta, GA · Member since 2017 · 85 posts · 30 votes
    8y

    @Michael Ehmann - Great job on turning your home into an investment. I'm in Atlanta if you need anything. Live in Alpharetta, office in Sandy Springs and do lots of flips from Hapeville to Buckhead.

  • Lender · Marlton, NJ · Member since 2016 · 126 posts · 44 votes
    8y

    Hi Everyone 

    Just wanted to add my 2 cents here. Both the HomeStyle and 203ks are excellent programs for renovation loans. Each has their own set of pros. One thing to note about the HomeStyle. It may not be the best program for larger projects if the after completed value is  it high going to be high enough. Keep in mind your renovation budget with a HomeStyle is limited to 50% of the after completed value of the home so if you are putting $200,000 into the home your value needs to be at minimum $400,000. I find that the larger renovations tend to be more forgiving using the 203k. Best of luck! 

  • Rental Property Investor · Mechanicsburg, PA · Member since 2017 · 20 posts · 11 votes
    8y

    @David Weintraub David, thanks for the advice. I go to a few local groups in Harrisburg area and heard that DIG and REIA are great. I saved your contact info and will reach out when I get settled in the area.

    By the way, interesting experience in your profile. Sounds like you've been very successful in your career and I'm sure you'll continue that trend in real estate investing. 

  • Rental Property Investor · Mechanicsburg, PA · Member since 2017 · 20 posts · 11 votes
    8y

    @Michael Ehmann that is a great story about your house hack. It shows how a little bit of creativity and sacrifice can afford a great deal of upside. You'll be able to save much quicker with a reduced cost of living. 

    Did you buy the condo with 20% down? If you bought well enough you may have enough equity to pull some out and use in your investment properties.  

  • Rental Property Investor · Mechanicsburg, PA · Member since 2017 · 20 posts · 11 votes
    8y

    @David Baer David, congrats on finding a house hacking deal. Do you mind sharing with me some details? What area are you buying? How did you find the contractor for 203k? Did your agent bring you the deal or did you find it yourself? I'm very interested in everything you are willing to share. 

    Also, shoot me a message or email and I'll send you the contact info for Bruce, the mortgage broker I am using. Let's link up to talk more about real estate.  

    Nick

  • Rental Property Investor · Mechanicsburg, PA · Member since 2017 · 20 posts · 11 votes
    8y

    @Denny Faircloth Wow, that is a great story about your client. I'm looking at properties that are very distressed, so I will absolutely look into that loan product. Thank you for sharing. 

    I would greatly appreciate a referral for your wholesale friend. Do you know if they work with 203k/homestyle loans, or just cash? Either way, I'm happy to get in touch. 

    Any recommendation on contractors or builders that you know can handle involved rehabs like that one that your client undertook? 

    Thanks again for reaching out!

    Nick 

  • Rental Property Investor · Mechanicsburg, PA · Member since 2017 · 20 posts · 11 votes
    8y

    @Bill Rich thank you for sharing, Bill! That's good to know. 

  • Investor · Sacramento, CA · Member since 2010 · 161 posts · 29 votes
    8y

    Way to go

  • Rental Property Investor · Hummelstown, PA · Member since 2015 · 638 posts · 653 votes
    8y
    Nick Hundertmark Congrats on that first deal! You did more on that first one than most people do...with a partner, LLC, private loan, etc. Good luck in Philly.
  • Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    8y

    Welcome to BP. Once you are in the Philadelphia area, you should first check out DIG http://digonline.org/

  • Real Estate Agent · Alpharetta, GA · Member since 2017 · 85 posts · 30 votes
    8y

    @Bill Rich - Great point, thanks for clarifying. Does the FHA 203K still only require a 3.5% down as well?

  • Lender · Marlton, NJ · Member since 2016 · 126 posts · 44 votes
    8y

    @Denny Faircloth yes its still 3.5% down for 1-4 units.  With the HomeStlye, the DP is 5% for a single family and then it increases to 15% for a 2 family and 25% for a 3-4 family. 

  • Real Estate Agent · Alpharetta, GA · Member since 2017 · 85 posts · 30 votes
    8y

    @Nick Hundertmark - I just checked and he is here on BP, name is Frank McGovern. Here is his BP profile link

    https://www.biggerpockets.com/users/fjm

    Most of my contractor / builder contact are in the Atlanta area. My partner is actually a licensed GC, so we build for other investors like the client I mentioned. Frank in Philly may be able to refer you to some builders there if you need.

  • Rental Property Investor · Atlanta, GA · Member since 2017 · 126 posts · 110 votes
    8y

    @Denny Faircloth, nice to meet you - just shot you a private message.

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