All Forum Posts by: Bennie Williams

@Aaron J Latal, I did not restore any of the historical features of the house.  I did a modern update, so other than the exterior, I did not deal with the historical committee that much and I didn't get any tax credits.  Overall, I'd say the historical committee was pretty supportive when I did have business related to them, but they are very strict on how things look.  They have a very long manual that details every aspect of how homes in Lafayette Square should look and yes, they stick very close to those guidelines.  

The contractors I used did not have much experience with historical houses but that wasn't a big deal since I was doing a complete modern rehab.  The one thing to keep in mind is that homes in that area are 100+ years old so there will be structural work.  Find good people for that aspect.  That is one of the reasons this project took so long.

@Tavan Skaggs, I actually sold this property.  Someone made me an offer I couldn't refuse! 

Investment Info:

Single-family residence buy & hold investment in St. Louis.

Purchase price: $153,000
Cash invested: $150,000

This project took about 20 months to complete. It was a full gut of a historic residence so the challenges were great but we brought it to completion. It is currently a short-term rental, used mostly as an AirBNB.

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

I saw an opportunity and decided to go for it. This was absolutely the most challenging thing I've had to accomplish in my entire life so far.

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

This deal was on the MLS. Many investors who looked at this property decided to pass. It was in such horrible shape but the location of this property is amazing. The negotiations went relatively smooth, I offered the asking price and it was accepted.

How did you finance this deal?

My loan broker found a lender that was willing to finance this project.

How did you add value to the deal?

I opened the floor plan and brought everything up to date. This property is about 130 years old and probably hadn't been touched since the 1970's or so. Most of the money was spent repairing and making sure it would meet modern building standards.

What was the outcome?

I decided to hold it long term.

Lessons learned? Challenges?

Too many lessons to list. The overall thing I'd like to say is to keep moving forward no matter what. I learned so many things on this project. I went through three contractors, two plumbers, and two electricians. Everything that could go wrong did, but I feel I can accomplish anything now!

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

Alex Bekeza is the best lender ever!

I love the St. Louis market, especially for buy/hold.  There's plenty of 2 and 4 family buildings to invest in.  Rents are relatively stable and there is a good amount of renters in that market as well.

Hey Shelley, I pay roughly $110/month per unit for water, sewer and trash in STL.  That is either duplex or 4-fam.  Sometimes it's a little less or little more but I would say your estimate of $115ish is pretty good.

@David Rosenhaus

Hey David, looks like you have a tough set of circumstances.  At this point it seems like you might have to wait things out for a bit.  I'd definitely use this time to learn and network as much as possible.  When covid restrictions are over, hit your local real estate meet ups consistently.  Become a familiar face among real estate investors locally and learn.  If you establish great relationships, someone will give you an opportunity either as a partner on one of their deals or as a worker.  For instance, there is someone who "works" for me and the only thing he does is visit my job sites and learns as much as he can about the rehab process.  I pay him a little bit of money and in exchange it gives me a local presences since I invest out of state and GC's will take advantage of you if they know you can't monitor them regularly.  To make a long story short, he as done this enough times, saved enough money, and now he's ready to invest on his own.  He's gained a ton of experience working with me and locally he has met trades people that can help him as he gets started.  This guy was fresh out of prison when he started working with me so he had no credit history, no money, no job, and a felony.  This is all possible because he established a relationship with me, I had an issue that needed to be addressed and he offered a solution.

Steps I'd take if I were in your shoes.

1.) Use this time to learn.

2.) That bankruptcy will be an issue but as time is passing while you're learning and growing, that bankruptcy will have less impact.

3.) Become known locally as a person that is eager to learn about real estate investing.

4.) Figure out how to add value or fulfill a need that an investor has.

5.) Save cash.

6.) DO NOT INVEST OUT OF STATE AS A NEWBIE.

7.) Positive thinking will attract positive opportunities.

8.) Consider FHA lending options to house hack.

9.) As you connect and build relationships with investors, ask them about owner financing.  They might have a property that want to sell and might be willing to hold the note.

10.) Partnership, partnerships, partnership.  As a newbie, shared experiences makes the highs and lows more bearable. 
 

I'd have to say gaining a deeper knowledge of the area I'm investing in, all the way down to the street or block.  I invest in urban areas which can sometimes have a different vibe depending on what block your property is located on.   

@Dmitriy Fomichenko  Yep, that was a super fun project.  Looking forward to many more!

@Shane Belfield

Hey Shane, I'm so sorry for the slow response, I literally just realized I never replied to you. Message me if you still want to chat about STL real estate. I definitely have great knowledge of that city.

@Zach Stillman for sure. Beatiful neighborhood . Hopefully I can find another project in that area once this one is complete!