All Forum Posts by: Ben Baye

Investment Info:

Single-family residence other investment in Ladysmith.

Purchase price: $144,000
Cash invested: $29,000

Personal home rehab for Home Equity Loan

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

We wanted land for our family and to make an investment by buying a home that needed rehab but was able to be lived in. This property would allow us through sweat equity and property equity to access capital for investing in rentals

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

I found the home on the MLS, we used an agent to negotiate the price from $150,000 down to purchase price.

How did you finance this deal?

Loan through local bank: 6.5% on 20 yr ammortization with a 2 yr balloon (extended to 3 years)

How did you add value to the deal?

Full scale renovation interior including; insulation, sheetrock, texture, paint, flooring, trim, new doors, T&G pine in office/sitting area, new cabinets, new electrical and plumbing fixtures, new water heater and furnace, cleaned out paneling from basement and redid wiring and water lines with pex. Put power in garage, insulated, covered walls and heated it.

What was the outcome?

Bought it for $144,500 invested cash of $30,000 down, about $29,000 for materials and sweat equity of about $32,000. Appraisal came in at $225,000. Refinance is for 80% = $180,000. This leaves us with about $62k available

Lessons learned? Challenges?

Typical renovation, always figure you will spend more than you anticipate. Be prepared for the appraiser. I bid the job just like I would for a client and gave the appraiser that info so he didn't have to figure out what I had invested in the property.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Real Estate Solutions. I would recommend them, they have a very efficient team and communicate frequently

So, I just downloaded the app in the hopes of not having to go through the whole logging into the internet to update my fire starters. But I cannot find this in the app to save my life. Am I missing it or is it not in the app? If it is here somewhere, how do I get to it?

Thanks

Investment Info:

Single-family residence other investment in Ladysmith.

Purchase price: $144,000
Cash invested: $18,500

3 bed 1.5 bath ranch SFR on 39 acres

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

We were planning to move to WI and wanted a personal residence with acerage that needed renovation so we could force appreciation after a few years and either take out an equity loan or do a HELOC to open up assets for investing.

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

Zillow and Real Estate Solutions for showing

How did you finance this deal?

20yr variable rate with 20% down 2 yr balloon which we extended to do the renovation at a better time for us.

How did you add value to the deal?

We are currently redoing the entire house; flooring, bathrooms, kitchen cabinets, removing Luna walls and sheetrocking, removed a bunch of unnecessary walls to open floor plan up, new doors and trim, new furnace, waterlines, water heater, lots of new wiring and lighting, pine T&G walls in dining room, insulated attic and a ton of landscaping (mostly tree, brush and flower removal). In garage; jacked up sagging roof, added breaker panel, wiring, lighting, insulated, new overhead doors and heat.

What was the outcome?

In progress

Lessons learned? Challenges?

As most renovations go there were a few hidden surprises with wiring and unexposed joists but only a few days to correct. Other than that it is going well.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Real Estate Solutions for acquisition

That's excellent. The example helps a ton. I will do more research before I move forward on the property on the NOI and how it affects value.

Thank you for the response TJ. That leads me to another question.

If the NOI is the primary factor, how do I determine an estimated loan value for refinancing post rehab? Or how does the projected NOI relate to the projected Value for refinancing to pull equity out?

I'm awaiting the expense breakdown for the property yet to determine current NOI.

Thanks again

I am looking at a 5 plex in a small town in northern wi. The deal is:

5 - 2 bed 1 bath units renting at $500/ unit at full occupancy currently with month to month leases. Asking price is $100,000. Some tenants have lived there for near 30 years. Based on pictures I can't see any major renovations needed but I'm confident it needs something at this price. My lender will do 80% of purchase and 100% rehab then refinance at 70% ARV with a 20 year note at 6%.

I’m considering trying to do 1 year of owner financing and covering the rehab then doing refi. I would like to hold it 2 years, up the rent to current rates of $600-$650 then sell it. 

I am not experienced in determining ARV on a commercial property like this. And given there aren't many comps how would I evaluate this property?

Thanks for the help!

Investment Info:

other investment.

Cash invested: $187,900
Sale price: $193,700

4 Bed 2 Bath 2450 SF Spec home on 1/4 acre:

Moved a home to a new foundation and did massive rehab.

I built the house on the side, hence the year for construction but it sold before completed.

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

I had a history with spec homes and enjoy building them so when I was researching the area we were moving to and realized the housing stock was low and RE agents were suggesting new builds, I thought let’s build!

It is also right behind an excellent school with a great family friendly neighborhood.

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

I was looking to do specs and A realtor turned me on to the area and lot. $19900 asking price - $19000 purchase price. House was scheduled for tear down by a GC I sub into out here and I asked him if I could have it. He checked with owner and it was a go.

How did you finance this deal?

A local lender funded 57% and my folks funded 28%. I had sweat equity and 11% cash.

How did you add value to the deal?

Sweat equity was my main contribution and what saved me when the structural issues came up. If I had to pay a GC to do those repairs I would have lost money.

What was the outcome?

$5800 in profit and an education on moving homes!

Lessons learned? Challenges?

I moved a home I acquired for free but during repairs realized there was significant structural issues that needed to be addressed. I couldn’t sell a subpar home so I did the repairs. This required almost the entire structure to be torn down which was a major expense I had not anticipated.

Do a more thorough inspection. I knew better because I’ve done a lot of extensive renovation projects.

Wait till weather is good for inspection.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Real Estate Solutions helped me acquire the property and sold it for me. They are well connected and promptly responsive with everything they do. They have an excellent team! In Barron County Wisconsin they are Rock Stars!

Investment Info:

other investment.

Cash invested: $187,900
Sale price: $193,700

4 Bed 2 Bath 2450 SF Spec home on 1/4 acre:
I moved a home I acquired for free but during repairs realized there was significant structural issues that needed to be addressed. I couldn’t sell a subpar home so I did the repairs. This required almost the entire structure to be torn down which was a major expense I had not anticipated.

I built the house on the side, hence the year for construction but it sold before completed.

Lesson learned: Do a more thorough inspection. I knew better because I’ve done a lot of extensive renovation projects. My inspection was done during January in Wi and was on a - 20 degree day which caused me to rush. I will wait next time.

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

I had a history with spec homes and enjoy building them so when I was researching the area we were moving to and realized the housing stock was low and RE agents were suggesting new builds, I thought let’s build!

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

I was looking to do specs and Real Estate Solutions turned me on to the area and lot. It is right behind an excellent school with a great family friendly neighborhood

How did you finance this deal?

A local lender funded 57% and my folks funded 28%. I had sweat equity and 11% cash.

How did you add value to the deal?

Sweat equity was my main contribution and what saved me when the structural issues came up. If I had to pay a GC to do those repairs I would have lost money.

What was the outcome?

$5800 in profit and an education on moving homes!

Lessons learned? Challenges?

Don’t do inspection in bad weather. Don’t move a home unless it only needs interior updating.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Real Estate Solutions helped me acquire the property and sold it for me. They are well connected and promptly responsive with everything they do. They have an excellent team! In Barron County Wisconsin they are Rock Stars!

I think new construction communities or development would be a great starting point for initial capital and equity. Then after you’ve succeeded in first development with the 500k use the experience to seek investors to develop exponentially. 

No requirement on the 500k being used directly but it would be a catalyst for scaling🤔😉.

Thank you for the responses.  I think I will pursue the acquisition of more property rather than the management side of things at this time. I do have a few PM’s to choose from.