All Forum Posts by: Jacob Martin

Has anyone heard of Baselane banking as an option for real estate investors, and if so, is it a solid option?  I was looking for a good bank and came across them.  It also features property management software and the ability to run reports.

Hello I am looking at a 4 quad plex deal and I am considering using a property management company instead of managing it myself. This would be my first deal for short-term rentals and I'm wondering what would be the better solution?

$250,000 with 20% down at a min.

Where would you go for FMR. I went to Zillow and looked for available rentals in that zip code and found 1250 ish/m.

Looking at others that are available, they rent for that. I'm not sure what FRM is, but I did a quick Google and AI search, and they both indicate 1250/m for a two-bedroom, one-bathroom apartment. I may be able to get a little more after renovating, but I would have to purchase it for far less.

Ok, so that property doesn't need too much renovating, just off of brief research, and it seems that the median rent for a 2-bed 1-bath would be $1250, which is what they are charging the one tenant they currently have.  The property would have negative cash flow if I purchased and did nothing with it.  Originally looked good, but after running brief numbers on it, it would not be something I would be interested in.  Conservatively, it would have a -20% cash on cash.  Properties I'm willing to purchase should have an 8 to 12% cash-on-cash.

Yes, that would most definitely peak my interest.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $250,000
Cash invested: $60,000

Single-family home, originally 3 bed 1.5 bath.

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

I saw an opportunity to implement the BRRRR method here. The combination of super-low interest rates made it appealing.

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

The realtor brought it to me, I knew the owner, and he gave me his best price.

How did you finance this deal?

FHA Loan

How did you add value to the deal?

We have done a complete property renovation, including removing a 24 wall to open up space and changed a space to add a 4th bedroom and a full second bathroom. The property now has a full master suite with a walk-in closet. We also have plans to add curb appeal next spring.

What was the outcome?

The property ended up costing far more in rehab than I originally anticipated. Because of this we began house hacking and built a mother-in-law suite for ourselves and rented the majority of the home out to cover the mortgage.

Lessons learned? Challenges?

I learned a lot about renting due to having tenants in the property while we renovated spaces. I learned a lot about where to find a lease and what to include in one as well as little details such as whether to allow pets in the home or not. One challenge I faced was the lack of communication from the tenant. I understand better now the necessity of doing occasional walk-throughs on rental properties.

I am looking into both and am comfortable with any non-structural rehab. I'm working with a gentleman who is considering being a private lender with me, so I think the max I want right now is 400k. I live in NW Indiana, so I want to stay in this market and decent neighborhoods. 

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $86,670
Cash invested: $25,000
Sale price: $146,500

My first fix and flip, my wife and I lived here while renovating it, held it for two years to avoid capital gains tax.

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

The biggest factor is that I work in the construction industry, so fix-and-flip homes come naturally, especially since I did the majority of the work myself.

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

I told my agent that I wanted something that needed TLC and also that it needed to be below a certain amount, as it was going to be my first home as well as my first investment property. I didn't negotiate too much on the price as it was my first deal, still learning.

How did you finance this deal?

I financed it with an FHA loan.

How did you add value to the deal?

I used my finances as well as sweat equity to completely renovate the entire house, even going so far as to relocate a furnace so that the living room space would feel more open and inviting.

What was the outcome?

I was able to sell the property to another investor and made a clean profit of roughly thirty thousand dollars, which I put into the property I am currently working on.

Lessons learned? Challenges?

I didn't try to lower the price at all, which I think I could have, also, in hindsight, I wish I had held and rented it out. It was on my mind at the time, but I didn't want to overextend, so I just sold. Now that I look back, I think the better move would have been to refinance and rent it out using the equity to purchase another rental property.