All Forum Posts by: Alex Capozzolo

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Philadelphia.

Purchase price: $138,000
Cash invested: $60,000

Contributors:
Jon Sanborn

Our Team purchased our 2nd official property! Duplex in Strawberry Mansion, Philadelphia PA - 19121. Big property that even has an attached garage! Just finished getting the permits from the city for the Renovations, plan is the BRRRR this one. Not sure if we'll be able to pull all of our money back out, but we hope to be close! Reno starts this month! Stay tuned :)

What made you interested in investing in this type of deal?

The numbers are almost perfect for an ideal BRRRR

How did you find this deal and how did you negotiate it?

MLS, which doesn't happen very often but we got lucky!

How did you finance this deal?

Crowdfunded the capital - funded by 1 private investor - my partner and I created a thorough 30-slide powerpoint, reviewing details on Philly, the specific neighborhood, our rehab plans, and our track record.

This was the 'it actually works' moment for my partner (@Jon Sanborn) and me. I'm in California, but I was giving 'out of state investing' a try. An AMAZING journey, all sorts of ups/down, took 12 total months but it worked!

NEIGHBORHOOD: Allegheny West in Philadelphia - Triplex!

DEAL FIND: We found the deal on the MLS, but it was first posted on HubZu, which is linked to Philly's MLS. HubZu is an Auction Site, and the property was bank owned.

FINANCING: Crowd sourcing $ from a family friend. This was our first time ever asking for money (isn't as scary as you think once you try it!). We knew the neighborhood well, and knew this was a deal that we could BRRRR and repay the family friend.

TOTAL PROCESS: 12 months between the Full Rehab and Refinance. Both of these were huge learning experiences. Tip - find a good lender and make sure you review every single detail with them upfront before beginning any type of process (i.e. is the property owned under a personal name or LLC, how many members are in the LLC). Those details can affect if a lender will loan you a residential loan vs a commercial loan sometimes, which both comes with different interest rates/terms.

THE FINANCIALS - BRRRR:

Purchase Price: $130,924 + Renovation Costs: $61,025 + Holding Costs (12 months): $2,384 = Total Investment Costs: $194,333

*New Appraisal Price: $330,000*

Refinance (70% LTV): $231,000 - Closing Costs: $16,000 - Original Investment: $194,333 = Total BRRRR Profit: $20,667

CASH FLOW:

Mortgage: $1,349 + Insurance: $150 + Taxes: $23 + Miscellaneous: $100

Estimated Mo. Repairs: $137 (5%) + Cap Ex: $82 (3%) + Vacancy: $219 (8%) + Property Management $274 (10%)

Total Expenses: $2,333

Total Rental Income: $2,735

Total Cash Flow: $402

Result: sold on Real Estate forever. 

CASH FLOW:

Mortgage: $1,349

Insurance: $150

Taxes: $23

Estimated Mo. Repairs: $137 (5%)

Cap Ex: $82 (3%)

Vacancy: $219 (8%)

Property Management $274 (10%)

Miscellaneous: $100

Total Expenses: $2,333

Total Rental Income: $2,735

Total Cash Flow: $402

THE FINANCIALS - BRRRR:

Purchase Price: $130,924

Renovation Costs: $61,025

Holding Costs (12 months): $2,384

Total Investment Costs: $194,333

New Appraisal Price: $330,000

Refinance (70% LTV): $231,000

Closing Costs: $16,000

Total BRRRR Profit: $20,667

NEIGHBORHOOD: Allegheny West in Philadelphia - Triplex!

DEAL FIND: We found the deal on the MLS, but it was first posted on HubZu, which is linked to Philly's MLS. HubZu is an Auction Site, and the property was bank owned.

FINANCING: Crowd sourcing $ from a family friend. This was our first time ever asking for money (isn't as scary as you think once you try it!). We knew the neighborhood well, and knew this was a deal that we could BRRRR and repay the family friend.

TOTAL PROCESS: 12 months between the Full Rehab and Refinance. Both of these were huge learning experiences. Tip - find a good lender and make sure you review every single detail with them upfront before beginning any type of process (i.e. is the property owned under a personal name or LLC, how many members are in the LLC). Those details can affect if a lender will loan you a residential loan vs a commercial loan sometimes, which both comes with different interest rates/terms.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Philadelphia.

Purchase price: $133,500
Cash invested: $61,000

Contributors:
Jon Sanborn

Our first BRRRR! An amazing learning experiences, lots of ups and downs, made mistakes and made money.

Lessons learned? Challenges?

Contractors ... are the worst. Set proper expectations, and put everything in writing!

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Philadelphia.

Purchase price: $133,500
Cash invested: $61,000

Contributors:
Jon Sanborn

Our first BRRRR! An amazing learning experiences, lots of ups and downs, made mistakes and made money!

NEIGHBORHOOD: Allegheny West in Philadelphia - Triplex!

DEAL FIND: We found the deal on the MLS, but it was first posted on HubZu, which is linked to Philly's MLS. HubZu is an Auction Site, and the property was bank owned.

FINANCING: Crowd sourcing $ from a family friend. This was our first time ever asking for money (isn't as scary as you think once you try it!). We knew the neighborhood w

Lessons learned? Challenges?

Contractors ... are the worst. Set proper expectations, and put everything in writing!

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Philadelphia.

Purchase price: $133,500
Cash invested: $61,500

Will fill this in shortly.

@Josh Levinsky which neighborhoods are you considering? There’s a ton of new development going on in particular neighborhoods in Philly that some people consider rough or C Class, I.E. Allegheny West. And what is your goal for the property and how long do you plan to keep it?

@Guido Bertoli Isaac is correct, you can inquire with some other lenders to at least see what they can offer ! But 1 year isn't totally uncommon.