All Forum Posts by: Jason Snider

Looking to expand. Lots of great reads in the bigger pockets forum. Since implementing a new business plan 2 years ago my partner and I have accumulated 27 doors with a few small multifamily properties but mostly SFR. Most of our purchases are in lower end areas but we rent out to HUD paid rents or Section 8 for most of our rentals. We have made lots of purchases where we add bedrooms. Some from unnecessary dining rooms, Others from living rooms that are unnecessarily large. Many 2 bedrooms that have become 3 during rehab. Thank you Brandon Turner for highlighting this value add technique in his podcasts. Shout out to you! We have increased rents on about 8 units now by over $200/mo each by turning 1 and 2 bedrooms into 3 bedrooms. Right now we have a 4 unit that were all 1 bedrooms when purchased, turned into 5 units with 10 bedrooms total. There was a lot of unused and underutilized space when purchased. We have put up walls, torn down walls where needed, and update where needed to attract better tenants. Plumbing and electrical changes have been made where needed as well as boiler and water heater updates to accommodate the extra tenants. In the mean time we have accumulated a solid team of contractors. Currently I self manage all units as well as the construction projects and I am looking to do this for the next couple years while I slowly turn this task over to my real estate team. Currently we are looking to move up to a medium size multifamily, 20-50 units. We have a few properties in mind and still looking for others. Purchase price of 400-700k. Any advice appreciated. We Currently have about 15-20% to put down but will also need rehab monies. Our current mid term plan is to accumulate rentals mid to long term and replace or add to current income within 5 years. All monies reinvested right now. Right now it’s a partner and I. We have a goal to create 100 units at an average of $250/mo free cash flow per unit which will create $150k each for us to replace incomes if needed, preferably add to or keep building. This per unit number does include adding in property management even though we are handing in house right now. Adding 25 units in one purchase would double our portfolio and place us 50% toward the goal. Anyhow that’s the goal right now, value add purchases. Most purchases to date are low end cash buys. We would like to start recycling cash at this point as we have a lot of equity but mostly properties that are under the 50k mortgage amount.

In this case it appears it is time to sell that property?? Like to hear options for and against. If it’s not cash flowing with equity removed than its time to sell and buy something that cash flows.

Love the house hack ideas. I wish I had done this when I was younger before starting a family. It gets more complicated as you get older and have a family. My advice going back 20 years would be definitely be to house hack to get started. Take advantage of this technique while in your 20s.

Run away. They will be problematic, demanding and entitled. Consider yourself lucky the showed their issues early.

I think it depends on the state. I would want my own license even if it was just for a few flips a year. Here in Michigan it is does not take much to get licensed and the cost is covered pretty quick with a deal or two. Not the reason I originally was licensed but my two cents if I was starting out. I know other states take more effort and funds. For me just bypassing agents on the buy side makes it worth it. Rather go look at houses when I want then coordinating a schedule with another agent. Getting the commission is just a bonus.

Fantastic story! Congrats!

Fantastic show. Just wanted to make sure I was understanding properly. Invoices for repairs go on the HUD-1 on the initial cash purchase right? Anyone have thoughts on tax deduction for repair costs since they are included in the initial purchase? (Rent before Rehab in order to write off repair costs). Still may worth it to get your money out.

Success story with advice and feedback wanted..... Hi all bigger pocket members! Although I have not posted much I’ve been watching everyone post great advice for just over a year now. All the stories of winners and losers has been invaluable in shaping my investor mindset. I have been in the real estate business since 2003 with licenses in Michigan and Florida but have only recently gotten involved with a new business plan of real estate investing with a focus on rentals. So far my business partner and I have accumulated 25 units consisting of mostly SFR and a few multifamily including 2 triplexes and a fourplex. Most all are rented with government agency subsidized rents such as Section 8, as all bills paid units. Our most recent purchase included a package deal for 3 SFR, all 2 bedrooms and a fourplex for a total of $66,600 for the package. All in Flint Michigan. Before anyone jumps 3 feet backwards it is not our first Flint purchase so I am aware of some of the downsides to being in this area. All needed extensive renovations but did have some positive features such as newer roofs, furnaces, and solid structural integrity. Over the last 2 months we have renovated all three SFRs and turned two of them into 3 bedrooms by converting dining rooms into bedrooms. The 2 bedroom is now rented for just under $800 and both 3 bedrooms for just over $1000, all bills paid. Once fully rented the 4 buildings will gross between $6400-$7000/mo. This is for all bills paid. After paying utilities we will net $5000-$5600/mo. So far all of our low end purchases such as these have been cash. We are looking to start financing so we can increase our inventory and maximize buying power which leads into my question. Getting to the 4 plex... And getting to my question for debate. We are still renovating all 4 units. This one needed a ton of work. We rented a 30 yard dumpster, filled it easily and could come close to filling another but have gotten by with putting most of the left over debris out to the trash little by little during renovations. Not sure the trash company likes us much but oh well. We have installed a tankless water heater so we can adequately supply all units with hot water as there was just a standard 40 gallon in place to handle the entire building prior. I’ll use the 40 gallon tank on another property eventually. Probably soon than later as I’m sure one will go bad. This also opened up space in the mechanical room that is now one of the bedrooms in a 3 bedroom unit. The 4 plex when purchased consisted of 4-1 bedroom apartments. We have creatively turned it into 2- 3 bedroom units each will rent for just over $1000, a 2 bedroom unit that has a deposit and will rent for $800. For the last unit I have a couple options. Option 1-leave as a large 1 bedroom unit that will rent for about 600/mo all bills paid. Easiest option. Option 2- put up a wall, a light and a door and make it a 2 bedroom unit that would fetch just under 800/mo. Downfall is this area has had very little demand for 2 bedrooms. 3s and 1s rent out much quicker. Over the last year we have experienced an extra month of marketing/ vacancy time with 2 bedroom opposed to 1s and 3s. This option would add about 1500-2000 to the current budget of the 1 bedroom. Option 3- This one is my fav as it completely maximizes the building but has some hurdles. Split the 1 bedroom unit in half. Install an extra kitchen, bathroom, bedroom, exterior entry door, and all the items needed for another unit. This would turn the building into a 5 unit. My thoughts on the upside would be that with 5 units the building could be commercial. I’m thinking we could get a much higher appraisal to pull cash out in 6 mos to a year when it’s fully rented being that it’s commercial and based on ROI opposed to keeping it residential with 4 units and basing values off comps in the area which are lower say 80k range. With 5 units, we could take in about 4200 net a month. With 4 units the building will net about 3600. This option will probably cost about 10-12k more than option 1. Downside is I am unsure if we start changing zoning how much in upgrades will be required by the city such as electrical. The building was built in the 30s. I can see if the electrical needed to be redone and it adding 10k more to the renovations. So what I’m looking for is feedback based on these numbers what everyone’s thoughts are on these three options and what other obstacles I may encounter based on this potential upgrade to 5 units. Thanks a ton in advance and looking forward to learning a ton from everyone.

Looking to get into air B and B. How do you guys anticipate occupancy rates for an area?

I do not understand why you would evict him. Property maintained and rent paid are the two most important factors. Not that I agree at all with the behavior but How does his 4th DUI impact you?