All Forum Posts by: Bob Langworthy

As stated above, focus on your goals. Focus on one thing (and read Gary Keller's book by the same name) until you have accomplished it. As you know, it's possible to make money in SFH, but that's not your goal. You have already done the numbers and have decided that multi-family is best for you.

Hope this helps,

I was under contract on a deal last fall for $575,000 with a seller carry of $100k and 10% down from me. I talked to the bank in advance to be certain that they were good with it. The second was an addendum to the P&S.

Hope this helps,

Risk tolerances vary widely as the responses on this forum. I say go for it. 

1) See if you can get seller financing which is a win-win for you and the seller. 

2) Keep everything the same for 6 - 12 months so that you can learn the property, regulations, tenants, etc. and then make changes. 

3) Use the first 6 - 12 months of cash flow to build cash reserves for the big capex expenses that are coming. 

4) Ask the seller for a list of capital expenditures over the past 10 years. By process of elimination (and with the help of a good inspection) you'll be able to develop your own list of projects to work on.

Hope this helps,

Before and after pictures of the downstairs kitchen demo. Spent last Saturday with my 18 year old filling a Bagster. The Bagster is a great product, BUT THEY DON'T PICK UP IN EVERY TOWN!!! I bought it 6 miles from the duplex at Home Depot, filled it with 3 yards of demo, but they won't come pick it up. Time for a plan B.

@Dave Foster has some great input on this. Another option if you get close to the end of your 45 days is to contact Spencer Taylor of Millcreek Commercial. They have commercial grade NNN properties that anyone can buy into.

Thanks, @Tony Robinson! Our first investment property was a vacant 4-office building that needed quite a bit of work. We saw the potential with that one and went for it. It turned out even better than my projections. It helped that my accounting practice was the anchor tenant. Looking forward to learning the lessons of residential remodel, rent, refinance, repeat!

@Andrew Syrios, the post above is from a form that BP uses, so we haven't completed the project. We expect the $35k budget figure may be a little low. Depending on rents, it should be worth $160 - $180.

Investment Info:

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

Purchase price: $95,000
Cash invested: $35,000

We closed on this vacant duplex on the last day of 2019. Needs a significant amount of work (budget of $35k) as it was never rented out to anyone except family (who will put up with a lot more than a regular tenant). It will be our first foray into residential as our first investment was an office building. So much to learn!

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

We're familiar with renting office space and are comfortable in buying more office buildings, but everybody needs a bed, not everybody needs an office.

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

We found it on the MLS 9 months ago, but when we ran numbers on it they didn't make sense for us. The listing was pulled and when it was listed again 6 months later it was closer to what we needed. After we got it under contract, however, the inspection revealed some concerns with the foundation. We negotiated a reduction based on that and closed a couple weeks later.

How did you finance this deal?

We're financing it with a HELOC and will look to refinance it (possibly a cash out refi), once we've finished renovating it and have it rented.

How did you add value to the deal?

The house is mostly untouched for the last 70 years with the exception of vinyl siding, vinyl replacement windows, electric service, and slightly refreshed bathrooms. We'll add LED ceiling light fixtures with light switches (currently all pull strings), new kitchen cabinets and countertops, one laundry area for the two units, update the bathrooms, paint, carpet, and refinishing of some wood floors. In the spring we'll have the metal roof painted and will probably tear down the shed.

@Tyler Matthews, @Charlie MacPherson is correct. A cash out re-fi is just a loan. Loans aren't taxable income. If used carefully, it can be a great tool.