Just Closed On This Property

Investor · Long Beach, CA · Member since 2017 · 60 posts · 33 votes

We just closed on a new 4plex here in the LA area. It's gonna need full renovation. The current rents are far below market rents. We have a 6.25 interest rate that will start adjusting after 6 months. So time is money on this one. Ill keep you updated along the way.

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Andrew SyriosPro Member

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Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes

Congrats Mickey!

Podcast Guest on Show #121

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Del Reese
Bowie, MD · Member since 2011 · 12 posts · 1 vote
3y
Congratulation and good luck with the rehab, Champ.
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Mickey PetersenPro Member
OP
Investor · Long Beach, CA · Member since 2017 · 60 posts · 33 votes
3y
Thanks Del!
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Stefani Mokris
Investor · Verona, NJ · Member since 2023 · 55 posts · 29 votes
3y
Congratulations!!!
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Mickey PetersenPro Member
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Investor · Long Beach, CA · Member since 2017 · 60 posts · 33 votes
3y
Thanks everyone. We now have 1 vacant unit. So that's great. Hopefully get to renevating that within the next couple weeks. I just bought some appliances for this unit. Took advantage of some Memorial Day sales lol. I want to go a bit nicer in these units because of the location. So Im going with stainless steel range, dishwasher, and microwave.
We also just closed on another 4plex! 2 of 2 to complete the 1031 exchange. Lots of work now lol.
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Mario I Fernandez
Miami Beach, FL · Member since 2019 · 124 posts · 48 votes
3y
That's Amazing!
Do you mind to breakdown the finances and profits?
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Mickey PetersenPro Member
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Investor · Long Beach, CA · Member since 2017 · 60 posts · 33 votes
3y
Yeah not at all.
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Mickey PetersenPro Member
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Investor · Long Beach, CA · Member since 2017 · 60 posts · 33 votes
3y
Both properties were a part of a 1031 exchange. We sold a 4plex for 900k and bought 2 4plexs.
1st Property.
4 units. Sale price $840k appraised for $930k
%25 down - $210k
Rate is %6.25 adjusts after 6 months.
Monthly payment plus tax and insurance = $5,081
Current rents: UnitA - 0, UnitB 4950, UnitC $923, UnitD $1303 Total- $3,176 / NOI - $38,112
Rehab Budget:
Move out costs: $15k
Structure/safety: $15k
Cosmetic: $40k
Overage: $7k
Total: $77k
Cash Out Refinance:
Depending on what the rates are in 12 months of course. I based this off of %7.5
New Value, $1.1M, %30 LTV, New Loan Amount $770k
Payment Plus Tax and Insurance = $6,399
Market Rents: UnitA $1800, UnitB $1800, UnitC $1800, UnitD $2375 = Total - $7,775/month/ NOI $93,300
Cash flow after utilities and management is $775
Cash out = $123K
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Mickey PetersenPro Member
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Investor · Long Beach, CA · Member since 2017 · 60 posts · 33 votes
3y
Property 2 - Purchase Price - 575K
Here's some photos of the first vacant unit that we are about to renovate.
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Mickey PetersenPro Member
OP
Investor · Long Beach, CA · Member since 2017 · 60 posts · 33 votes
3y
Property 1 - Purchase Price - 840k
Here's some photos of the first vacant unit that we are about to renovate at this property as well.
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Mickey PetersenPro Member
OP
Investor · Long Beach, CA · Member since 2017 · 60 posts · 33 votes
3y
Quote from @Mickey Petersen:

Property 1 - Purchase Price - 840k
Here's some photos of the first vacant unit that we are about to renovate at this property as well.

Photos from the finished unit.
Kitchen After Photo
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John Chong
Lender · Houston, TX · Member since 2023 · 235 posts · 255 votes
3y
Congrats on the new project! Keep us updated
1 Reply
Andrew SyriosPro Member
Moderator
Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
3y
Congrats Mickey!
Podcast Guest on Show #121
1 Reply
Allen DuanPro Member
Property Manager · Los Angeles, CA · Member since 2022 · 590 posts · 463 votes
3y
Congrats! I hope to be doing something similar in LA in the near future. If you're interested in setting these up as a MTR, let me know and I'd be happy to get some MTR numbers for you.
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Mickey PetersenPro Member
OP
Investor · Long Beach, CA · Member since 2017 · 60 posts · 33 votes
3y
Quote from @Allen Duan:

Congrats! I hope to be doing something similar in LA in the near future. If you're interested in setting these up as a MTR, let me know and I'd be happy to get some MTR numbers for you.
Thank you. I am interested in MTR. Although I don’t think I will with this property. Something in the future though.
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Stefanie Gray
Real Estate Agent · Irvine, CA · Member since 2023 · 9 posts · 0 votes
3y
This is awesome! Congrats!
0 Reply
Sol Naim
Member since 2023 · 20 posts · 6 votes
3y
Quote from @Mickey Petersen:

Both properties were a part of a 1031 exchange. We sold a 4plex for 900k and bought 2 4plexs.
1st Property.
4 units. Sale price $840k appraised for $930k
%25 down - $210k
Rate is %6.25 adjusts after 6 months.
Monthly payment plus tax and insurance = $5,081
Current rents: UnitA - 0, UnitB 4950, UnitC $923, UnitD $1303 Total- $3,176 / NOI - $38,112
Rehab Budget:
Move out costs: $15k
Structure/safety: $15k
Cosmetic: $40k
Overage: $7k
Total: $77k
Cash Out Refinance:
Depending on what the rates are in 12 months of course. I based this off of %7.5
New Value, $1.1M, %30 LTV, New Loan Amount $770k
Payment Plus Tax and Insurance = $6,399
Market Rents: UnitA $1800, UnitB $1800, UnitC $1800, UnitD $2375 = Total - $7,775/month/ NOI $93,300
Cash flow after utilities and management is $775
Cash out = $123K

Great job!
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Mickey PetersenPro Member
OP
Investor · Long Beach, CA · Member since 2017 · 60 posts · 33 votes
3y
Quote from @Mickey Petersen:

Quote from @Mickey Petersen:

Property 1 - Purchase Price - 840k
Here's some photos of the first vacant unit that we are about to renovate at this property as well.

Photos from the finished unit.
Kitchen After Photo

Photos from second completed unit.
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