Innovative Strategies

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Rob Greynolds
  • New to Real Estate
  • Chicago
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2 for 1 Off Market deals in 2 different markets

Rob Greynolds
  • New to Real Estate
  • Chicago
Posted Jul 23 2022, 12:07

Hello, I have an opportunity to purchase a nice single family home in a desirable area in the Chicago suburbs off market. The person wants to retire in North Carolina and is willing to sell her house to me by owner. After some further discussions we discussed her goals and realized we could also partner on a house hack deal in North Carolina. My question is what's the best way to the purchase the Chicago property? She would be willing to quit claim deed her house to me as we have a very trusting relationship and I want to make sure I give her a fair and honest deal. I was thinking a cash offer for the Chicago place and then a cash out refi(if the numbers work) for North Carolina.
 

Looking to talk to someone for guidance!

Chicago, Illinois

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Paul De Luca
  • Real Estate Agent
  • Chicago, IL
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Paul De Luca
  • Real Estate Agent
  • Chicago, IL
Replied Jul 25 2022, 07:36

@Rob Greynolds

Why not get a loan to purchase the property in Chicago and then you can reinvest the remainder of the funds in other projects?

The "best way" to purchase depends on a number of factors like your ability to get loan, how quickly you both want to close, and opportunity cost of doing a cash offer vs getting a mortgage.

Inflation is already here so if possible you should be securing as much long term, fixed rate debt as you can.

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Jonathan Klemm
  • Contractor
  • Chicago, IL
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Jonathan Klemm
  • Contractor
  • Chicago, IL
Replied Jul 25 2022, 08:31

Hey @Rob Greynolds - It's not perfectly clear how you are looking to structure these deals.  Is the Chicago property an opportunity to add value/equity or is it already in good condition?  If you can fix it up, I am with @Paul De Luca get a loan and then BRRRR to leverage your cash the best way possible. Where is the property located....just curious?

Several questions around the house hack.....Assuming you are in Chicago how will a house hack in New Carolina work?  Are you moving?  What type of partnership would that be?  Who is signing on the loan & going on title?

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Michael K.
  • Real Estate Broker
  • Chicago, IL
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Michael K.
  • Real Estate Broker
  • Chicago, IL
Replied Jul 25 2022, 09:03
Quote from @Rob Greynolds:

Hello, I have an opportunity to purchase a nice single family home in a desirable area in the Chicago suburbs off market...

You have the cash on hand to buy two houses outright? That's a desirable situation to be in. Can you get a loan? Are you invested in anything else currently? I would suggest sprinkling some money in the market if you haven't already. Get some third party price opinions and then get a lawyer to facilitate the transaction for you. I can recommend one if you need it. As for how you finance the deal that's up to you. 

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Rob Greynolds
  • New to Real Estate
  • Chicago
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Rob Greynolds
  • New to Real Estate
  • Chicago
Replied Jul 25 2022, 13:37
Quote from @Paul De Luca:

@Rob Greynolds

Why not get a loan to purchase the property in Chicago and then you can reinvest the remainder of the funds in other projects?

The "best way" to purchase depends on a number of factors like your ability to get loan, how quickly you both want to close, and opportunity cost of doing a cash offer vs getting a mortgage.

Inflation is already here so if possible you should be securing as much long term, fixed rate debt as you can.


 Thanks Paul, this was my thinking as well! 

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Rob Greynolds
  • New to Real Estate
  • Chicago
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Rob Greynolds
  • New to Real Estate
  • Chicago
Replied Jul 25 2022, 13:52
Quote from @Jonathan Klemm:

Hey @Rob Greynolds - It's not perfectly clear how you are looking to structure these deals.  Is the Chicago property an opportunity to add value/equity or is it already in good condition?  If you can fix it up, I am with @Paul De Luca get a loan and then BRRRR to leverage your cash the best way possible. Where is the property located....just curious?

Several questions around the house hack.....Assuming you are in Chicago how will a house hack in New Carolina work?  Are you moving?  What type of partnership would that be?  Who is signing on the loan & going on title?

It's an opportunity to BRRR for sure and originally what I was thinking was leveraging the BRRR to grab a duplex in NC and renting one side as an STR/LTR and then she could live in the other side. So it would be a 50//50 partnership deal that could generate some cash flow for her but I would keep the properties under my name. It was just a thought maybe a little crazy:) The property is in Northbrook walkable to just about everything so at the least I know I can make it a good BRRR, I do need to figure out how much repair costs still!

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Rob Greynolds
  • New to Real Estate
  • Chicago
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Rob Greynolds
  • New to Real Estate
  • Chicago
Replied Jul 25 2022, 13:56
Quote from @Michael K.:
Quote from @Rob Greynolds:

Hello, I have an opportunity to purchase a nice single family home in a desirable area in the Chicago suburbs off market...

You have the cash on hand to buy two houses outright? That's a desirable situation to be in. Can you get a loan? Are you invested in anything else currently? I would suggest sprinkling some money in the market if you haven't already. Get some third party price opinions and then get a lawyer to facilitate the transaction for you. I can recommend one if you need it. As for how you finance the deal that's up to you. 

I have 4 doors at the moment 1 LTR, 2 STRs, and BRRRSTR I'm working on that was a cash deal. I won't have a problem getting financed and have a good amount of cash but not enough to buy outright. Thanks for the response!

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Jonathan Klemm
  • Contractor
  • Chicago, IL
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Jonathan Klemm
  • Contractor
  • Chicago, IL
Replied Jul 26 2022, 05:34

@Rob Greynolds - I am still not sure I understand how the Northbrook property would work.....if you are going to BRRRR the property that means it's in rough condition and it needs to be renovated? Do you have any idea about the repair cost and ARV?

Happy to work through some of those numbers if that would help.

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Michael K.
  • Real Estate Broker
  • Chicago, IL
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Michael K.
  • Real Estate Broker
  • Chicago, IL
Replied Jul 26 2022, 07:23
Quote from @Rob Greynolds:
I have 4 doors at the moment 1 LTR, 2 STRs, and BRRRSTR I'm working on that was a cash deal. I won't have a problem getting financed and have a good amount of cash but not enough to buy outright. Thanks for the response!

The purchasing aspect is easy if you and the seller can agree on a price, just get a lawyer to handle it for you. There is not much for us to contribute on that side of the conversation. If you are asking us how to finance it based on your current portfolio, then that mostly depends on your individual preference and financial situation. How far along are you in the BRRR process?

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Rob Greynolds
  • New to Real Estate
  • Chicago
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Rob Greynolds
  • New to Real Estate
  • Chicago
Replied Jul 31 2022, 13:36
Quote from @Michael K.:
Quote from @Rob Greynolds:
I have 4 doors at the moment 1 LTR, 2 STRs, and BRRRSTR I'm working on that was a cash deal. I won't have a problem getting financed and have a good amount of cash but not enough to buy outright. Thanks for the response!

The purchasing aspect is easy if you and the seller can agree on a price, just get a lawyer to handle it for you. There is not much for us to contribute on that side of the conversation. If you are asking us how to finance it based on your current portfolio, then that mostly depends on your individual preference and financial situation. How far along are you in the BRRR process?


 I haven't even purchased the property yet just running numbers!

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Michael K.
  • Real Estate Broker
  • Chicago, IL
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Michael K.
  • Real Estate Broker
  • Chicago, IL
Replied Aug 1 2022, 15:23
Quote from @Rob Greynolds:

I have 4 doors at the moment 1 LTR, 2 STRs, and BRRRSTR I'm working on that was a cash deal. I won't have a problem getting financed and have a good amount of cash but not enough to buy outright. Thanks for the response!

I mean the BRRR you are already working on, are you planning to use that money to buy this next one?