All Forum Posts by: Cole Bennett

I agree with Corby. In the construction industry it is not unusual to write a contract with a penalty for failing to complete the project by a certain date. Corby's method turns that around into motivation rather than punishment, which could work better. Either way, it's always tricky nailing down what exactly "complete" means, so you should be as specific as possible.

I usually give tenants a generic form of the lease along with their application, just so there are no surprises. I let them know that I'll be filling in the blanks with the terms we've already discussed, but I haven't bothered at that point since they're not approved. Pretty simple. I don't feel like it gives any sense of obligation to either party at that point. Never had an issue with this process.

Good luck!

We are currently going through a passive real estate crash course and learning about syndications, etc. We already own a duplex and quad in Lexington, KY - our hometown. They earn their way and a little more. Recent events caused us to move to NYC. Family of four: 2 kids, 13 and 16, renting a 2BR in midtown Manhattan for $5,300.

Trying to steer clear of analysis paralysis, I do feel we have some unusual circumstances that could take a little extra figurin'. We didn't ever figure we'd buy in Manhattan, but we could if we had to. If we're considering something like a $200k investment into a syndication, should we be considering how that money could be a downpayment on a (decent 2BR) $1M condo in NYC? Is that crazy? Should we stick with the more "straightforward" plan of syndication?

This question is probably only for people who know this market really well. We're still trying to figure out things like maintenance fees, etc. If we bought, we'd eliminate our exorbitant rent, but do condo/co-op owners really make much equity, even if the market does well? And what if (slight chance) we could buy a few units together, and rent some out?

TIA for anything. I'm new to this but have been binging BP podcasts for weeks and hope to be helpful to others in the near future!

Investment Info:

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

Purchase price: $150,000

Duplex that had been recently renovated. Nice place, but we bought it in part to help a friend make another investment.

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

We had bought a 4-plex in the area 6 years prior. We knew this wasn't the same "cash cow", but didn't think it looked bad. Not the most savvy decision on our part, but we were helping someone we knew and respected try to move into the area.

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

Some folks we knew and liked had bought the house next to ours and were renovating it when the market fell out in '08. They were 80% done, and couldn't get any more money to finish. They had been investing serious money into our neighboring property, one which just the year before had been a straight-up crack house. They had bought, renovated, and held several properties in the area. They asked if we were interested in buying this recently-renovated duplex. We thought we'd help out.

How did you finance this deal?

Standard 20% down bank loan.

How did you add value to the deal?

It was nice and stabilized already, not much to do but manage it. We've kept it running smoothly. Just put a new roof on it (they took off four layers of shingles and had to install sheathing, since there was none to begin with!).

What was the outcome?

A decent property that pays for itself. Nothing amazing. We are talking with lenders right now to do a cash out refi between this one and our 4-plex, and pay this one off.

Lessons learned? Challenges?

We were doing a favor, and should have still treated it like a business decision. We should have negotiated the seller down more. Or just found another property owned by people we didn't know. With the $150k we paid for this one, we probably could have gotten 150% of the house we did at the time if we had really hunted.

Investment Info:

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

Purchase price: $103,000
Cash invested: $70,000

4-plex that was in terrible shape when we got it, in a rough but growing area near downtown Lexington. We put a lot of our own sweat equity into it: replaced radiator/window units with central HVAC in 3/4 units, new roof, new paint, tuckpointing, and major interior renovations of each apartment. Currently appraised for $350k. Our cashflow #'s are after all expenses (average maintenance, utilities, mortgage, etc.).

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

Haha, we bought this right after reading Rich Dad, Poor Dad. It was our first rental property, purchased while we were still renting ourselves.

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

We got pretty lucky with a very motivated seller, in a market where others were already looking out for great deals like this one we just happened to pop in right when it listed. We offered what the seller was asking.

How did you finance this deal?

Typical bank loan, 20% down. My wife is a pediatrician - this has always made things a little easier with banks.

How did you add value to the deal?

I renovated most of the units myself, as they came empty. We also had a new roof put on, had the exterior painted. We installed HVAC in 3 of the units and got them off the boiler and window AC units.

What was the outcome?

Currently appraised for $350k. Rents went from $1,200 to $2,900.

Lessons learned? Challenges?

I would have done more earlier. Been stricter about rent. Broken the large 3BR/1BA first floor into two units.

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

I don't think he lives in the area anymore!