All Forum Posts by: Andrew Michael

@Pat Danaher One thing I did was take a bunch of HML's, Regional Bank Managers, Funding/ Mortgage professionals to lunch or set up meetings with them. This gave me an idea of what they were looking for and whom to use depending on the deal I had in place. Take the time to shop around for the terms that best suit you.

More importantly however, is focusing on finding a good deal rather than the funding.  As @Andrew Syrios said, if you find a good deal the money will come.  If the sellers are truly motivated then they may be willing to sell at discount or non-traditional terms, explore these options.  Also don't forget to ask sellers if they would consider owner financing.  So far on my current direct mail campaign I've had a handful of sellers consider that as an option.  

Lastly, I don't think you need to worry about your reputation.  As long as you are honest throughout the process you should be fine.  Deals fall though everyday.  If that happens so be it, move on to the next one.  

Hey @Anthony Ianozi Welcome to BP and most of all thank you for your service!  Sounds like you already have a great start to your investing career.  

Well wishes,

Andrew

@Bryan Blancke Thanks, I will have to go back and check that show out.  I don't recall the term off the top of my head.  

@Account Closed yes, I had insulation in mind.  When I spoke with 2 of the 4 tenants they said maintaining temperatures in the unit was not a problem.  Though it is something I would like to have done, the truth is the tenants have been fine for years without it so its not the most pressing issue I see.

I am in contact with a local investor/ agent there who is very familiar with the local market.  We will speak tomorrow so I will see what he says about all of the issues raised thus far.    

@Russell Brazil just to clarify for all readers, that is not a basement really.  The pictures are from under the home only accessed through a small crawl space opening in the cellar.  Its hard to tell but only Id estimate that only 1/3rd of the quadplex has open space underneath, the rest is directly on the foundation.  

@Russell Brazil Above is the property I spoke to you about.  As always, thanks for your expertise!  

Hi all,

I will try to cut through the fluff and get right to it.  I have a quadplex that I am going to submit an offer on however I wanted to get feed back from everyone.  Lots of factors here, some manageable some not so ideal however the numbers seem to work every way I run them

I was contacted by the son of a deceased mother who after her death, found out she owned several properties.  He has 0% desire to be a landlord or keep them so I have an extremely motivated seller.

The quadplex is a waterfront property that sits on about an acre of land.  The build is about 70 years old and was built over top an original stone home foundation (see pictures attached).  It is fully rented and the last time a room was available there were 12 applicants within 4 days however the local economy is 100% reliant on coal mining which could potentially disappear at any time.  I spent the past weekend visiting the community, eating at restaurants and learning as much as I could about the local market.  We are dealing with a lower class community where high school is the absolute highest level of education and there is little to no population growth.   That being said, the people seemed hard working and friendly and I personally have no issues working with people of this mentality or the challenges that come with it.

The Numbers:

Asking price: 49k However he basically told me to throw any offer out.

Current rent: 1003 total monthly rent (both son and agent feel this is about 300 below market rate)

Flood Ins: 1400 per year. (though in flood zone the area has not flooded in over a two decades since a dam and bank work was completed)

Annual Taxes: 876

Utilities: Tenant Pays

Water: TBD

Closing Costs: 7K

Repairs: 10k.  Personally there is about 5-7k worth of work I want to do for me to be comfortable as a Landlord.  Things like new gutters, encapsulate exposed wires, making sure each unit has two exits, etc.  The biggest factor/ unknown will be the support underneath which I will have a structural engineer take a look at.

THE GOOD

I am quite sure I could offer low 30's for the property and he would accept.  He verbally (and in email) said hes was not set on 49k and just wants out.  Every way I run the numbers, even using current rents I would be able to have all of my personal money out in under two years and have the entire property paid off in 10 (absolute worst case).  If I am able to successfully raise rents, the pay down time becomes even more attractive.

THE BAD

I am skeptical about the foundation support under the home and will see what the engineer says.  The property is quite a ways away from me making self management a nightmare.  Again this is not a town where property management companies exist.  I thought about having the best tenant be an on site manger of sorts but this caries obvious risks as well.  Lastly, it would seem to me if the mine closes my property and the entire town become worthless over night.  Unlikely since there is a rich mining history here but thinking through every scenario here as coal is a dying industry.  

Overall this goes against everything i know to look for in an investment; good schools, growing economy, job stability, etc.  What makes this attractive to me is the quick pay off and high rent ratio along with the long term "potential" of a waterfront lot for a rebuild.  Even if the entire project flops I would be able to recover long term as I am young and enjoy the risk.  

Any and all feedback is much appreciated.  Thanks so much in advance!

@Uri Robinson Hey there and Welcome.  As @Russell Brazil said I own a Duplex in Hagerstown and have probably walked through at least 50 multi units or so in Hagerstown alone.  I agree with Russell, I would personally stay away from Downtown but that is my preference.  Hagerstown has great cash flow plays if that is what you are looking for.  

I think Driving or Walking for Dollars is an awesome  way to start.  That has been a great way for me to obtain leads, network, and thoroughly learn neighborhoods in my target markets.  

Keep us posted on your progress

HI @Michael Lyons. There are a handful of people on BP that own in Hagerstown. I too wish not to invest in Downtown Hagerstown but I have units over by City Park. As for the rental market, demand is high and I have had no issues renting my units out. I am very happy with the returns I am getting. 20%-25% COC return in Hagerstown is certainly achievable.

As for SFH rehabs, someone else could better speak on that as I have only flipped in the Silver Spring area. I am still new to the game so take my advice for what it is but I see Hagerstown as a cashflow rental market more than anything else.

@Ed Canales  Inbox me, I have someone I have used for my last flip that works out of Baltimore.  He can do what you need done.