All Forum Posts by: Carter Still

Investment Info:

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

Purchase price: $230,000
Cash invested: $73,000

Purchased fourplex, did cash for keys/assisted inherited tenants in moving out and relocating, renovated all four units (bathrooms, kitchens, paint, tile, countertops, sinks, did an electrical service upgrade, added HVAC). Refinanced in 2020 and it appraised for $385K. Two units are airbnbs, two are leased out. net cashflow each month is between $1000-$2000 due to airbnb variability.

John Leavelle haha, thank you!!

@seth Marcus side note - I’m obviously having trouble with the tagging function on BP discussions.

@seth_marcus wow, that’s extremely helpful information, and I’m happy to hear it from another OKC investor! Thank you so much. To answer your question, we are doing 5 yr fixed commercial loans with 20% down on purchase and 100% of reno financed (so long as the as-complete appraisal agrees with our reno line items). I have never heard of the “delayed financing exception”, but that is powerful information. It would be a game changer to get around the seasoning and refi or just finance the cash investment as soon as it is completed. Thanks again for the thorough and helpful response!

Thanks, Cory! After posting this I found some other helpful posts which are in line with your guidance. That’s awesome that you have a SFR in Edmond all the way from Ohio. Let me know if you ever need any OKC input from a local!

I’m just getting my feet wet in multi-family and Value-add projects. Currently looking at numbers on two duplexes, and would love it if I could pull off the BRRRR, but don’t know how to assess ARV on multi-family. I believe it’s typically based off of income/rents, but my lender says that since these duplexes are vacant we can’t speculate what the rents will be. Therefore he would use past sales of other multi-family as comps. Past sales are pre-renovation prices, and none have popped up as flips since the investors hold them. So no past sale will provide a usable comp to substantiate the ARV. Numbers for 1 of these identical duplexes are below: $180,000 purchase (2580sf) $75,000 renovation $2800/month gross rents SF homes sell for up to $160/SF in this neighborhood The income approach would be... (2800*12*.75)/.08 = $315,000 (if I understand typical calculation correctly) Lender will do 80% LTV with 12 months seasoning. Thank you in advance for any information you can share!

Disclaimer: I am not an attorney, and I am new to this, but wanted to share what I'm doing for 3 partner investing Keeping Operating Agreement simple and open ended, and establishing and managing ground rules via a Joint Venture agreement. Op Agreement is important for ownership and tax class among other things. Important considerations to me: Capex/out of pocket requirements: -how much to set aside per property for emergencies. -how much to have on hand for new deals, when to have it, and if allocated, when to replenish by. (What are acceptable reasons to pull-out, what are consequences of not contributing?) Purpose of revenue and equity: -reinvest all or portion? Time commitments: -property management or self management -if self-managed, who's on call and when? Acquisitions: -what are your prerequisites for making offers. We like 100% consent for purchases. Right of first refusal and scope of business: -for us, all deals within the state of OK are brought to the team, and then there is a predetermined response time before allowing a member invest separately. Buyouts: -for us, it is buy out cash contribution and equity and future rents stay with entity. This isn't an exhaustive list, but it helped us have some productive conversations about our motivation for investing. Remember, operating agreements and any agreement can be amended!

Jeff West I agree on commercial loan. Visit some smaller, private banks, and I'm sure they will finance your purchase + rehab costs up to 80% if it appraises and your plan is solid. Plus you already have one rental, so you should have solid collateral or even sufficient equity for a LOC. Just be prepared to be babysat if you go this route. Will probably need an approved contractor, and then will have to get each invoice approved by lender as you work your project.

What number definitely works? Offer that. Sounds like your analysis is solid. Long story long about realtor relations: I'm in a less competitive market than most, but not being able to find a supportive realtor is foreign to me. In my opinion, a pro should never influence your offer unless their experience tells them you will lose out on the deal. My realtor is an experienced REI herself. She does wince on low ball offers, and even today said, "they won't take that", but at the end of the day she drafted the offer I asked for. They didn't take it, she was right, but I learned more about the seller and I haven't given anything away. I'm also confident that in a situation where she has private information from the buyer and the seller, as you might be dealing with, that she would just facilitate the negotiation and transaction without nudging either party. If you're checking listings 100 times a day then it sounds like you're already doing a lot of the work. Consider grabbing a newbie realtor who's hungry, have them let you into places/fill in the blanks in a solid contract, and trust more in yourself for decision making. For numbers, I like to use BP calculators, my own, simplified excel calculator, and then a good reality check to make sure awesome numbers (or not so awesome numbers) make sense for the area.