All Forum Posts by: Greg Bishop

Before & After of one of the bathrooms. Check out my IG account for more before and afters.

@domestichusband

Investment Info:

Single-family residence buy & hold investment in Manayunk.

Purchase price: $200,000
Cash invested: $10,000

We bought our first home in 2011 with the intent to rent. After saving for 3 years we moved out and started renting.
It was our first steps into investing.

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

We weren't comfortable buying a duplex (a miss there) so we bought our first home with the intentions of renting it out when we moved. It's situated and a younger neighborhood perfect for renting.

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

Our fist realtor negotiated $40k off the asking price.

How did you finance this deal?

FHA loan. 3% Down.

How did you add value to the deal?

No upgrades needed.

Lessons learned? Challenges?

First rental, so we learned how to find tenants and deal with issues.

@Kevin Whisler

Just go for bro!

$1000/mo is a lot of wiggle room to cover up any mistakes you make.

Just make sure you have enough capital (cash or credit) or know how to fix any potential issues for mechanicals, roofs, after inspections.

We just finished stabilizing a triplex property in Manayunk (a high B class neighborhood) that cash flows over $1k/mo, so it’s definitely possible the numbers work.

Trust your intuition. It looks like you ran the numbers correctly. Though the taxes seem a little low for your after purchase price. They generally change to 1.3% of the purchase price.

Hope that helps

-Bishop

@Yonah Weiss

@Jordy Enmanuel Corporan

I agree. Go and take a look, especially if it's your first time outta state. And while you're there take a look at a few other properties and neighborhoods. At least, you'll be able to write it off if you have an LLC formed. I'm sure you can find a RE agent on BP somewhere.

A couple hundred$ is worth it’s weight in gold for a piece of mind.

Good luck!

-Bishop

Brad,

 Congrats! We just went through something similar with our first tri-plex and just stablized it this month after buying it in late December. Many of the replies have been very informative.

I would literally take  piece of paper draw a line in the middle and write down the pro's and cons of the following senario's since this is your first investment as a mental exercise; Keep all tenants, Keep one tenant, and the Band-aid approach which is to just remove them all.

In our scenario we tried all three;

We personally met with all tenants (one was vacant) and explained the raises in rents at a discount just to "float" the property until the spring.

One tenant opted out immediately. Which we quickly turned over and rented out after a month of no occupancy.

We attempted to keep the other tenant,who was nice, but we ended up extending them for a few more months with a minor rent increase (half of what we were looking for). After which we turned over, and rented with a month of no occupancy.

Looking back, if I had the resources, I would have done the band-aid approach, but in our hybrid approach, it gave us a chance to take mini breaks in between churns. So it worked out.

I guess the point I'm trying to make is that, have a plan of what you would like to do, and pursue that angle. But this is a business of people which can be unpredictable. So have a backup plan if your first scenario doesn't work out.

I would definitely try to meet face to face so that your can act quickly and don't loose anything in translation via email or text, which often happens.

You've already taken that action to invest so I'm sure you're ready to tackle this as well. Best of Luck

-Bishop

Investment Info:

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

Purchase price: $350,000
Cash invested: $61,000

Value-add triplex in the Manayunk area of Philadelphia. Increased purchase to use commissions towards purchase price.
Upgraded units and increased rent rolls 33%. Achieved a 15% Cash-on-cash return in very rent stable area of Philadelphia.

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

Looking to get into multi-family deals

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

Found on MLS. One of our clients passed on the deal. We thought it was strong enough to not pass up.

How did you finance this deal?

Used a HELOC and commissions to fund the down-payment. Used bank financing for the rest of the purchase price. 30 year fixed.

How did you add value to the deal?

Most units were in pretty good shape. Installed new cabinets, floors, and paint in one unit. Updated kitchen, repaired walls, and paint in another.

What was the outcome?

Able to turnover tenants and increase rents by approximately $1000/mo. in total.

Lessons learned? Challenges?

How to deal with multiple tenants at once. Learned how to time construction more precisely. There are more potential problems to look out for all at once. Multiple mechanical failures (hot water heaters, boilers, ect)

Investment Info:

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

Purchase price: $350,000
Cash invested: $61,000

Value-add triplex in the Manayunk area of Philadelphia. Increased purchase to use commissions towards purchase price.
Upgraded units and increased rent rolls 33%. Achieved a 15% Cash-on-cash return in very rent stable area of Philadelphia.

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

Looking to get into multi-family deals

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

Found on MLS. One of our clients passed on the deal. We thought it was strong enough to not pass up.

How did you finance this deal?

Used a HELOC and commissions to fund the down-payment. Used bank financing for the rest of the purchase price. 30 year fixed.

How did you add value to the deal?

Most units were in pretty good shape. Installed new cabinets, floors, and paint in one unit. Updated kitchen, repaired walls, and paint in another.

What was the outcome?

Able to turnover tenants and increase rents by approximately $1000/mo. in total.

Lessons learned? Challenges?

How to deal with multiple tenants at once. Learned how to time construction more precisely. There are more potential problems to look out for all at once. Multiple mechanical failures (hot water heaters, boilers, ect)