All Forum Posts by: Cale Delaney

I’m flying out to Phoenix tomorrow to attend the residential assisted living facility training with Gene Guarino. I’ve listened to him on the BiggerPockets podcast and the real estate guys as well as from Rich dad radio and see lots of opportunities for the residential assisted living facility asset class. Is there anybody that is an investor in this asset and business that has some input or feedback on it? Or anybody with experience that is looking for a partner? I have capital to deploy and I am a senior project manager for a large international contractor by trade. Currently I have single-family homes and a small multi family, but I am looking to expand and I am very interested in this and would love to speak with some people who are experienced in it.

@David Silver glad to help!

Hi, I've been house-hacking before it was a thing (aka for about 18 years now) and still do. Whenever I've rented or bought a place I've always made sure it has at least 1 more bedroom than I need and I rent it out. Through that I've been able to more than cut in half my housing expenses. As for what you can get for rent, that all depends on your market and housing situation so there is a lot of variability there. Do some research on Facebook and Craigslist as to what rooms are renting for that are similar.
As for what kind of tenants, over the years I've had the full spectrum of men, women, young, old, etc. I can't say one has been better than the other, but in finding some people around your same age and with similar interests that typically works out well. Again though, it depends on what you're looking for. Do you want a renter that just stays in their room the whole time or do you want someone to interact with and actually share the house with? That really should be where you start in terms of looking for different types of renters.

Another item to add here is don't always go with the cheapest guy. He's cheap probably for a reason and you may end us spending more in the long run that way. 

@Jason Crowe what’s your email? We typically use a standard AIA contract that addresses most of these items. I can send you the standard terms and conditions from that. Typically a contractor will try to use their own contract or just have you sign their proposal. Usually it favors them so read it carefully and don’t be afraid to negotiate and cross out or add terms to theirs. Or better yet, ask to use the standard AIA. It’s pretty neutral to both parties.

I see a lot of stories about how rehab typically takes a lot longer and is more costly than people anticipated. I work for a very large contractor (commercial restoration and strengthening) and wanted to share some things that I think people need to do when hiring a contractor to help prevent some of this:

1. Read the contract. You’d be surprised how many people don’t even take this step. Remember that during contract negotiation is when you have the most leverage if they want the job so here is your chance to put in terms you want.

2. Have an agreed upon schedule beforehand, not just a duration. Make them give you an actual schedule and include it as part of the contract.

3. Include liquidated damages in the contract. This should be enough to cover your daily holding costs for any delays. Should the schedule extend as a result of the contractor falling behind you can charge them a daily fee. That way you don’t lose money on holding it for delays.

4. Make them give you an itemized schedule of values prior to starting. This is a line by line list of each major work item with a value. This way you can confirm what they are billing for is complete.

5. Don’t pay upfront!!!

6. Make sure they are required to get your approval on any finishes or fixtures prior to installation.

7. If you are local or have a local person that can inspect the work, make payment contingent upon approval of your inspection.

8. Require weekly project updates and how their progress compares to the original schedule.

9. If there are change orders, request backup and a breakdown of how they arrived at the costs. Remember, you can always negotiate.

10. Always, always include at least a 20% contingency on your budget. Things do come up in rehab.

I hope this helps some people!

Appreciate the feedback!

Moises,  I'm actually from Keene, NH area so not too far from your neck of the woods.

Casey, definitely reach out to Steve. He's a good guy to work with. 

Sent you my email!

Investment Info:

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

Purchase price: $400,000
Cash invested: $44,000

Just closed on a 4 plex in Lake Worth Beach, FL. This is my first venture into MFH (have a couple SFH that I rent and house-hack). I focused on the Lake Worth Beach area, specifically in the corridor between Dixie Hwy and the intracoastal (the sweet spot!), because it's an historic district and a very walkable/bike-able area, even to the beach and my ultimate goal is to convert to short term rental with it.
The property is (1) 2/1, (2) 1/1, and a studio.

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

My "Why" is to get financially free to be able to spend quality time with my family (3 kids!) and travel more (my passion). As such, I see real estate as the way to achieve this.

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

Zillow, MLS, and walking the area. I walked the entire area of this town that I was interested in and looked at many properties and made numerous offers. I'd made an offer on this one that was rejected and circled back about a month later with another offer and it was accepted this time.

How did you finance this deal?

Conventional financing. 15 yr term, 30 yr amortization. 3.625% rate.
I used the same lender I've been using the past 10 years and they typically get the best rates and products. I've used them on multiple purchases and refi's.

How did you add value to the deal?

Insurance is high due to one building not having hurricane clips. Looking to add these and reduce insurance by $3k.
Planning to raise rents up to market as leases expire over the next 6 months.
Will be looking to convert to STR in the near future.

Lessons learned? Challenges?

Closing was challenging as I bought this with an out of state partner and the title agent was very difficult to deal with in terms of doing a dual closing. Other than that, the financing went through with no issue.

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

I'm an agent so I represented myself as the buyer.
Steve Berry with Liberty Financial (part of Evansville Teachers Credit Union). He's the branch manager and I've used him on all my purchases and refi's for the past 10 years. Great products and rates.
We didn't use them on this transaction, but wish we did! Blueline Title Company. I've used them on other transactions and they are very easy to work with.

Hi,
I'm new to the BP forums (have been active in the FB group though) and am a RE investor specifically in Palm Beach County and am looking to see what meetup or mastermind groups are out there that are still active during this time. I have a couple SFH and a 4-plex and am actively growing my portfolio and looking to network and connect with others!