All Forum Posts by: Brad Dickinson

@Caleb Heimsoth - I ran the numbers a couple of different ways and based on what I kept coming up with it was usually between $600-700k. I also know of another property that will be similar to the one I’ve got once it’s upgraded, currently on the market for over $700k. The seller had at one time 37 properties but this was the last of her portfolio to go. After he husband had passed the property was never filled with tenants again since 2013. That’s why the $250k in repairs is needed.

Thanks in advance for any info! I just recently purchased my first investment property. I was able to pick up 11 units on a owner carried note with 0 interest, 0 down and over 60% equity! In fact, my one and only tenants rent is 85% of my monthly payment. I have been a long time listener to the bigger pockets show and thankfully just had this amazing deal fall into my lap from a prior real estate investor who is retired. My problem is that all 11 units need to be updated and I am on a small budget. So here are the numbers as follows to lay the deal out there:

11 - 1 bed / 1 bath apartments  

$145,000 - current value of property - 

$60,000   - purchase price

$59,500   - owed on property

$500        - monthly payment 

$425        - current monthly rental income

0%           - interest 

$900       - rent per unit possible with all bills paid. Due to the property being in high demand for short term leases to oil                      field workers.

$250,000 - estimated needed to completely do full rehab and bring all units up to like new with all new plumbing,                                  electrical, etc

$650-$700,000 - ARV potential

So whats the problem?? Before I had this property I left my stable salary job to pursue a career in real estate sales. So now traditional funding is an issue until I have two years tax returns.  I do have a partner who has about $30,000 in capitol but this in not enough down for the hard money lenders I have spoken with to fund the deal. They say its because its a commercial property. Any suggestions would be greatly appreciated!!

@Karen R. Thank you again Karen! All the info has been very appreciated!

@Karen R. Karen, again thank you so much for the advice. In the area I’m purchasing these, there is a high volume of oilfield workers, who are usually from out of town. I have checked local short term rentals, and some are currentIy 100% occupied and going for $280 a week. It seems thIs approach Is more ”hands on“, but even If I started at $225 a week, I couId potentially get $1,800 a month for the same unit that would only bring in $800 a month, as a single family 2/2. Because of the floor plan, there is only a set of doors that separate the two units. I am thinking that if the amount of workers in town slowed down, I could always remove the kitchen out of one unit and simply go back to being a 2/2 single family. Is there any real problem of going this route??

@Karen R. Thank you so much Karen for the advice! Yes, one of the unit are rented and we don’t expect it to take much to get at least one more available. Our monthly payment is $1000 a month and with two rented we would easily clear that. I forgot to mention that 5 of the 6 units were previously 1/1 duplexes that have been converted to 2/2. I know the math makes sense to convert them back because a 1/1 will easily rent for $600 a month in our area. But I’ve heard two bedrooms are more desirable. Any thoughts on converting them back?? It seems like it could VERY easily be accomplished.

@Ellis Hammond Thank you so much Ellis for the advice. I do agree cash flowing the rehab costs on this one could work out great in my favor. Being my first property I can expect to have surprises and not having deadlines to make for financing, relieves a lot of stress. Thank you again for the advice, and I may have to take you up on that offer!

@Percy N. Thank you!

I’ve finally put together my first deal! A customer of mine, from when I had a small construction company, had a property to sell. Her and her husband previously had nearly 40 properties and one of the last ones left is a small apartment complex that sits on two acres of highway frontage. There are 6 total units, each Is separate, solid slab, and cinderblock home. There is one 3/2, one 2/1, and four 2/2. All but one unit has been vacant for nearly five years. After her husband passed away she did not ever re-rent the units. Because it seems she is not hurting for money due to having sold the previous properties, and she does not care to fix up this property, she made me a really great deal. Even though I believe this is still a low appraisal, the county is giving the property a valuation of $105,000. My customer told me that all she wants for it is $60,000. Yep, $10,000 a unit. She will also carry the note with no down payment, and no interest. Simply $1000 a month for the next 60 months. The property is in a highly desirable location known for its oilfield population. I think with $150k I can rehab all 6 units for a total of $4950 in total rents. My question to anyone willing to lend advice, would be, how to finance the rehab while not having to lose out on the 0% interest owner finance arrangement??