All Forum Posts by: Evan Kline

I'm traveling to Boise, ID for a few days and if there are any BP folks who would like to meet up I'd love to hear about your market and any success stories you have.

Quick bit about me: I'm a newer investor in Winston Salem, NC. I also work for the largest real estate group in the city as their database manager. 1 house hack (duplex) 1 SFR, and working on two BRRRR at the moment for a total of 4 properties.

We do both Mid-term (Traveling nurses and business professionals) and Long-Term rentals. 

Refinancing the brrrr's this summer and adding in 2-3 more properties in Winston by the end of the year and also working on Seller Financing deals in the Appalachian mtns (about 1.5 hrs from me) to start adding in some Airbnb short-term rentals.

I'm flying in to Boise March 24 and flying out the 28th. 

I'd love to connect. Let me buy you a beer!

Hey all,

Quick deal analysis question. Looking at a quadplex for 125,900 (sellers lowest price- started at 160k, tax value has bounced between  145k and 160k over the past 5 years). There is a 5th unit that can be remodeled (and the building is grandfathered in to allow 5 units), but it's basically an unfinished moldy basement right now. Currently all units together rent for $1650- it's being run by a property management company, full of renters who are paying on time. Some updates could raise rents- adding a communal laundry, adding separate heating units (currently all on the same heat with no individual unit control), etc. Basically everything about the house needs updates, but it's solid and functional and pretty easily rented.

My partner and I have a private money lender ready to go. The main question we have is how feasible is it to pull our money back out in a refinance? Especially if we add the 5th unit, which would certainly up the value significantly, but won't that change the type of loan?

I've been working on multiple deals, but nothing has panned out yet, this would be our first if we move on it.

Thoughts? anything else we need to consider? 

Additionally, I think there is a lot of potential for the rents to be raised and to purchase for lower than asking price- I just ran my numbers based on the current scenario.

I've been on the side lines for about 6 months, reading, researching, learning, etc. 

I've found my first deal and hope to close within the month- duplex which will return 20-30% CoC.

I've found a second, much larger deal: a set of 6 multi-family buildings, that make up 19 units. 

Location: across the street from a well respected, but small, university. The neighborhood is B- to C+, but because it's right next to the university, the crime rate is almost non-existent due to a robust campus police force. 

Asking Price: 629,900

Average monthly rent: $8,600

Yearly Taxes: $6,669

Based on my analysis (but I of course could be wrong), this has a Cap Rate of over 10%, even if I include a property management fee

All my personal money is tied up currently in this first duplex. I've read here on BP syndication is a potential option, but I'm not sure the steps to take down that road.

Any thoughts/help?

I recently found a house in my neighborhood "driving for dollars." Yard over grown, it's close enough I can keep an eye on it and I haven't seen a car there in the past few months.

My county has pretty immaculate online records if you know where to look. 

I find out the property was purchased for $8,000 (late 80's early 90's, I forget) due to have been paid off in 2004. It was deeded over to the owners two unmarried sons before the father died. One of the sons died in 2012 leaving only one. The public record states the taxable address is the same house, but I really don't think anyone is living there. The living son is in his 70's, I know his name and can't find any record of his death so I'm assuming he is still around, however someone stopped paying taxes on the home in 2010 (before the first sons death) and it's 6 years delinquent, totaling ~$9000 in back taxes. 

I'm going to send a letter to see if someone is checking, or if it's being forwarded elsewhere, but does anyone know of a way to find contact info outside of public records? LinkedIn/Facebook/etc are no goes- this guy is too old to be into that apparently. 

Thank you @Ramon Cuevas, @Account Closed, @David Dachtera for the helpful comments. The rehab loan won't quite fit what I wish to do as I don't need money to just rehab the home, but also need to get my money back out of the property for the next down payment. Based on my purchase price and the market value of the home I believe both those goals are possible. But also maybe not. I'd at least rather ask the question "How can I?" than simply say "I can't." 

I plan on using the space between the home purchase and the 'refinance,' however that unfolds, to form an LLC. After some research, what I am wanting to do is a Non-Arm's Length transaction which is completely legal and is not bank fraud (as long as I don't lie about my marriage). It just may not be as straight forward as I initially thought. Fannie Mae just recently updated their stance on this here.

I believe as long as the market supports the eventual second sale price, I'm still in the green, but I will certainly talk with some local lenders. 

But this was a learning opportunity! Thanks all!

My wife and I are just starting out in real estate.

We bought out first home in May (which we live in currently), my wife purchased with 3.75% down, first time home buyer perks, etc. and it's only in her name (intentionally, in NC so we don't have those weird community property rules)

I'm negotiating our second house deal- a duplex we're planning on moving into to "house hack" while we rent out our first house.  (We were married after we purchased the home so we have a significant life event to justify leaving the owner occupancy earlier than one year)

The second home we'll be able to purchase with 5% down (off market, owner financed deal, no agents, etc. hopefully I'll be posting in the success stories soon!)

So here's the question. In an ideal BRRR strat, we'll get this through owner financing, refinance through a bank, and hope to get a good appraisal where the 75-80% refi will get us cash back. The problem is this house could appraise anywhere from $170-250k possibly as high as $300 depending on the level of rehab we do. I put in an offer for $150k I'm confident about. But I'll need the home to appraise in the low to mid 200 range to get my money back out to move on to the next deal. And I'm sure the bank will try and hit the low end of appraisal.

BUT WHAT IF: My wife (and she's on board with this, by the way), 'buys' the house with the owner financing, again in her name only. We move into one unit of the new house (which is actually bigger than our current house so we're not even downsizing). THEN. She 'sells' me the house. AND, since my name isn't on our first home, I can tap into the first time home buyer perks, only put down 3.75% which is LESS than we put down initially, AND we can set or 'force' the value of the home anywhere in that spectrum (within reason, certainly, but without the fear of a conservative appraisal)- possibly pulling out enough for multiple down payments. 

Thoughts? Is there a catch somewhere I'm missing? 

After some recent "driving for dollars" (actually walking) in my neighborhood I ran across a "for sale by owner" sign. As inquiring minds do I contacted the owner, got some info on the house, and of course asked if they would be interested in owner financing. It turns out the owner just retired and is liquidating so she can be free to travel and not worry about property management. Owner financing is her ideal scenario, as she likes the check in the mail every month. She is willing to owner finance at 3%/30 year with 5% down. I have yet to confirm, but I don't think she wants a balloon payment either, she's willing to ride it out til the end. 

Now, that seems like a great deal to me, at least from a financing standpoint. I'd be hard pressed to get better terms, even with an FHA first time homebuyer.

The house itself is a 5 bedroom, 3 bath, 1800 sqft. Similar homes sold recently (this year) in the neighborhood sold for ~200k (a few 4 bed, 2 bath homes around 1800 sqft). If you go a couple streets over (literally, just 2 streets) similar homes are being sold 250k-300k. She's asking 180k, just reduced the price from 190k (therefore down-payment of 9k). The thing that's making it less attractive to the average buyer is a portion has been converted to an in-law apartment. So the current house is actually a separately metered split 2 (or 3) bed, 2 bath; and  1 bed 1 bath. A couple rooms were lost to give the apartment more livable area. 

The kitchen is straight out of the 70's, and there are some nicely dated frilly curtains on all the windows, but based on visual inspection the house itself seems in great shape (Pending professional inspection). 

The rent is the bit that makes me question getting into the deal. Historically the main house has rented for $875 and the apartment for $460. The apartment is currently rented by a woman who has lived there for 12 years and rent hasn't been raised in, you guessed it, 12 years. Based on nearby rentals I can comfortably get the main up to $950/month. If I did some rehab I could potentially get it up to $1200/month. The apartment situation I'm less familiar with, but certainly can get it over $500, maybe as high as $600. 

Even pushing the rents to their highest limits I'm struggling to get close even to a "1% rule", which makes it a less than desirable purchase. On the other hand, the home will be well leveraged and I'll be getting 20% cash on cash return (after accounting for vacancy, repairs, taxes, etc) even if I don't raise the rents which makes that piece an attractive deal. If I add some sweat equity and renovate a bit I can get as high as 40-50% COC.

The other factor is I can stand in my back yard, throw a rock, and hit the house. That is attractive as managing the home won't require any driving. 

I haven't begun negotiation yet- Any thoughts, wisdom, advice, good dinner ideas, before I sit down with her and hash things out (I need to go grocery shopping tonight after I set up a negotiation time)?

Thanks for the referral, Brandon.

I actually met and got coffee with Charlie yesterday! Definitely an awesome guy. I'll reach out to him again and see if this is within his wheelhouse.

I'm needing helping writing up a contract on a seller financing deal in Winston Salem NC. 

It's a portfolio deal with 15 properties so there's some complexity to it. 

Is anyone experienced with this or able to offer a referral?

Thanks!