All Forum Posts by: Cory Iannacone

@Jody Schnurrenbergerthanks!

This is my second rehabbed property, which was just completed today (and listed today).  So, the jury is still out on whether or not this can officially be considered a success story.  Let me know what you think.

I purchased this duplex in mid-September in a historic district in Harrisburg, PA. Unit #1 was a very large 1 Bed / 1 Bath which the owner just rented out for $775.  Unit #2 was a very large (2 floors) 3 bed / 1 bath, which was vacant and needed some work.  Current owner was looking to try to get $1,000 for unit #2 if he kept the house.  I purchased the house for $119,000.00 with $3,000.00 seller help to offset some closing costs.  

I completely updated Unit #2.  Also I added an additional bath to make it a 3 Bed / 2 Bath.  Each floor in unit #2 has its own bath and very large bedroom. 

I am out of pocket $27,000 in rehab costs.  Most of that money went to Unit #2, however, some went to exterior common maintenance.  I just listed Unit #2 for $1,330.00.  So, what do the numbers look like?:

Purchase Price:  $119,000.00  ($3,000.00 went to seller assist)

[Potential] Gross Rent Revenue: $2,105.00

PMIT: $909.00

ARV: $170,000.00

Rehab: $27,000.00.

@Kyle McCorkel  Also--all of your Fannie/Freddie loans on 2 - 4 unit multifamily are going to require 25% down. Some smaller local banks in the area will do 20% down with a different loan structure.  As mentioned, I can give you the contact info for those smaller banks to reach out to.

@Kyle McCorkel  I just shopped around lenders for a recent purchase.  PM me and I'll send you a list and more info.

@Account Closed Thanks for the detailed response.  Any idea why my accountant is pushing the Premier Desktop version?  He told I could use the Pro version, but it is more difficult for him when I transfer the info to him for taxes.  I don't know why he said the Pro version didn't have the capability to make different class systems, but that seemed to be his rationale.   

Looking for some guidance on Quickbooks as a REI who is only in the beginning stages.

1. Online vs. Desktop.  In short, the benefits from the online version appear to be easy access from remote locations and having multiple users access it.  Drawbacks appear to be the monthly cost.  Desktop benefits appear to be a 1 time fee up front.  But drawbacks would be no online access (i.e. must use the computer which software is downloaded on).  I would be inclined to go with the desktop version to save money.

2. Pro vs. Premier.  My accountant is recommending Premier because he said you can track each properties' finances (including profit / loss) separately.   It looks like a lot of people on BP use Pro.  Any further input would be greatly appreciated.

@Christian Bors  Thanks!  No appraisal done at this point.  There were a number of reasons why I did put the extra money into it. 

#1 - to attract the best tenant.  

#2 - to address as many issues with the house as possible (i.e. plumbing, electrical, etc.) to avoid these issues once a tenant was in place.  Nothing had been done to the house since 1965.

#3 - to leave open the option to sell the house, 

#4 - to maximize the appraised value for purposes of a HELOC within the next 2 years. I have 24 months of no interest on my Home Depot account for the materials I purchased. Once that no interest runs out, I will have to pay off the HD bill. The HVAC will most likely need to be replaced around that time, so I'll probably need another $5K. I would like to pay all those expenses through the HELOC, if not actually pull some extra money out for another investment. The higher appraised value, the more money I will have available to me. For the time being, I am just trying to maximize the cashflow.

@Tony Wooldridge 

Kitchen and bathrooms are all tile flooring.  Purchased at Home Depot.  Originally priced at $2 / sq ft, but bought on sale (I believe it ended up being between $1.70 and $1.79 / sq ft)

Basement is vinyl plank flooring.  (Perfect for basement because it won't be damaged by water.  Very easy to take out and put back in.) Also purchased at Home Depot.  Originally priced at $2 / sq ft, but received discount (couple hundred dollars off) through HD's contractor bid room.

First Floor is all original hardwood.  I just removed carpeting (which had been there since 1965) and had the floors redone and stained darker.  (labor was about $2 / sq. ft.)

@Account Closed I respectfully disagree.  You have to remember this was my first rehab.  I believe this was an excellent opportunity to learn the whole process from start to finish without risking any money whatsoever.  There was no capitalizing on emotions here.  I could have walked away at any point.  But then I would be looking for another house to learn from and most likely would have been taking on financial risk to learn the process.  Your worst case scenario (i.e. that I "got played"), really isn't the worst thing.  The worst case scenario would have been taking on my first project, not completing it and/or losing money on it.  Here, I will still walk away with a tremendous amount of knowledge that I didn't have before without have risk one penny of my own money.  I only see upside--the potential to earn infinite return on a $0 investment. 

One more before and after.  Hallway bathroom.