All Forum Posts by: Devin Haertling

@Mark Christopher Javier

This is in Mt Vernon IL.  Population is 15K.  It sits straight east of St Louis MO by about 80 miles.

We did not have any units in Mt Vernon prior to this.  I had called a realtor to look at another deal outside of Mt. Vernon (I noticed he had a lot of commercial residential property listed in southern Illinois).  That deal did not work out but the realtor that showed us the property is our current PM.  He does commercial residential real estate and also has a PM company.  After the first place he showed us didn't work out I explained to him what we were looking for and from there things took off.  In a different town but using the same realtor/PM we now also have a 24 unit under contract to close in March and last week signed a contract on 8 units in another town.   

10% down for financing:

Coming into this deal I had already purchased 7 single family rentals without Zane.  We used the same bank to purchase the 8 unit complex.  They let us bridge the equity I had in my single family rentals to the 8 plex thus only needing to put down 10%.  

@Robert Fornwalt @Mark Christopher Javier

It’s definitely not been the easiest project. When we bought it we were unaware it had a reputation of a place where drug dealers lived. We rebranded the building and after 6 months it was full. 

It is a C class property in a B/C area. The south side of the city is considered a war zone but if you go north of the main road it considered a safe area.  This sits on the north side of said road.  We have not had any issues with violence or drug deals since turning it around.  

It was a very fortunate situation on how we acquired it.  The previous owner had went around and bought millions worth of real estate in a short time but didn’t have any systems in place to manage so much property so places got neglected. Then he got a divorce and ended up facing some legal issues.  It was the perfect storm for us to find a killer deal.  

Our property manager was very familiar with the building prior to us purchasing it which helped tremendously and he was very confident it could be turned around. 

The only hiccup was we thought we could get 550 per month per unit.  

Because of the stigma of the place we had to lower rent to 450 per unit.  We filled all 8 units at 450.  Since then we have had turn over and we renovated one unit and we get 550. Two other units we get 500. The plan is to continue to turn the other units or raise rents as the leases expire until all units are at least at $500.  

Will all units full we cash flow about 1000 per month. 

Zane mismentioned our deal just slightly.  We signed a 15 year note with only 10% down (16k). The other 14k he mentioned was for repairs and bills we had while the units sat empty.  So the mortgage really eats into our cash flow.  If we would have done 20% down at 20 Years we would cash flow an extra $360 per month.  

@diana muresan

Yes I bridged equity to purchase the six SFR and they each have their own mortgage.

Since that post we have purchased a 7th SFR and an 8 unit apartment complex all using the same strategy.

I questioned them on the 10 max financed properties. They didn’t allude that this would be an issue.  They only said as kind as appraisals keep coming back favorable they will continue to make loans for me.  This is a small local bank that keeps its loans in house so not sure if that matters

Maybe when the time comes and we try to finance that 11th property we will hear something different. 

Yes they have a lien against both properties 

Hello all,

I am wondering what online sites do you use to find info on city demographics free or paid? (population, growth, median income, average rents, employers in the area)

Jarrett T. I used the equity in my personal residence as a down payment on my first property 3 years ago. That has snowballed into 7 sfh that we have acquired without any money down.

Just a general question I have always wondered. Everyone says if you are highly leveraged and there is a market crash then watch out your going to get burned. Why? If the property remains rented out through the market crash and cash flows, how is that going to adversely affect you? I could see if you wanted to use the equity in the house (that's no longer there because of the crash) to purchase more property then you would be affected. Here's my example: (in this example my goal is to hold properties for retirement income) If I own 5 houses 100% financed and the market did what it did in 2009 tomorrow but I remain to rent them out and I am able to cover my expenses then how am I adversely affected? I might be upside down on the mortgages but if the rents are paying the mortgages down and covering all expenses then I have the staying power to outlast the down turn in the market correct??

Charlie MacPherson And this was a territory I have never been involved with. Thus the post to BP. All the insight has been great and there was never any intention to screw over our realtor. This was all proposed by the seller. After gathering all of this great information we made the decision to contact our realtor. Which by the way she was supper appreciative of and it actually strengthening our relationship with her. I have had 10+ phone calls with her in the last 16 hours and she is even trying to come up with ideas and solutions for us. So for those out there who continue to attack my integrity and willingness to still proceed with the deal let me ask you this: If you were my realtor would you drop me and never talk to me again or would you still work with me trying to get the deal done??

Charlie MacPherson Just wondering if you read my post about letting our realtor know what's going on and if we move forward with the deal it will involve the realtors??

Everyone please read my last few posts!!!!! The realtors are not getting cut out of the deal!!!!!! This is his current stance. He has dropped the asking price $40,000, and compensation for that on his part he wants us to cover all costs including commission. At this point it is pretty cut and dry we accept those terms or we walk