All Forum Posts by: Jennifer Hoover

Hey Matthew, where specifically is the property? Good contractors are slim pickins up here right now, but I know a couple pretty decent contractors looking for interior work for the next few months.

Wow, this came out really nicely! I have always run screaming from the 203k loans because it felt like too many hoops to jump through. It's really cool to hear in-depth about someone having used it successfully, and liking the product too. Glad this worked out so well, despite the challenges. What a fantastic first project!

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Little Falls.

Purchase price: $72,000
Cash invested: $14,000

Two Family rental property. Steady performer for 11 years.

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

Because I was young, poor, a single mom working two jobs and had no credit! I knew I needed another way (besides working my tail off for others) to get ahead. This deal stuck out to me mostly because no one wanted it. Which meant that the seller probably would work with me on owner financing. I didn't look hard at any of the numbers I analyze deeply now; it was all about getting that foot in the door, getting a hold on a property, and creating some opportunity and hope for myself.

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

I found this on the MLS. I negotiated the deal down slightly, but because the seller agreed to owner finance, I was willing to pay a higher amount since he was taking a lot of risk. This is something I tell my own clients now as a Realtor - you probably aren't going to get a killer price AND owner financing... killer prices are for cash, owner financing means some compromise and some compensation for a seller's risk.

How did you finance this deal?

I got the seller (who owned the property outright) to sell to me for $42,000 with $1,000 down with a term of two years, and interest only payments (at like 7%) for the first year. The property title transferred to me, and he held a first lien. So, I was responsible for all the costs from insurance to taxes to water, which was attractive to him to be rid of.

How did you add value to the deal?

It was a very distressed property. So, I rehabbed the building to the best standard I could on my limited income at the time, in about 8 months.

What was the outcome?

After the property was rehabbed and rented, I did a cash out refinance at $72,000 on a 15 year mortgage. I used the cash out to make some additional improvements, and used the money to fund another deal on a larger multifamily property.

Lessons learned? Challenges?

This was 12 years ago, so I didn't have access to things like Bigger Pockets. I didn't know that what I was doing had a name (BRRRR). I still had a flip phone! So, it was all a challenge, and I had no road map. I had to really THINK and scheme through everything with no real guidance. Which was a fantastic opportunity- there was nothing but grit and persistence (and poverty and stubbornness!) driving it all, so I got the opportunity to prove to myself that I could do it. And then I was addicted!

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $34,000
Cash invested: $48,000
Sale price: $147,000

2800 sq ft Victorian top-to-bottom remodel

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

I showed the property to several investors and all the folks looking at it were clearly not going to do justice to the highest and best use of the property, neither for the property itself or the community at large. I felt it needed to be restored appropriately.

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

Via the MLS as a Fannie Mae.

How did you finance this deal?

I called in an investor to put up the original purchase price for a return of his original investment plus a percentage of profit at sale.

How did you add value to the deal?

The cash backer for this deal is also a contractor, so he did the roof replacement with payment for the labor coming out at sale. I only had to pay up-front for the materials, he got a quick additional roof job.

What was the outcome?

This one came out gorgeous, and sold fairly quickly at a price we were ok with and paid everyone out well.

Lessons learned? Challenges?

My mother had a stroke a month in to our work on this project, and it threw my timeline WAY off track. I learned that it was a huge value to have a contractor and investors who were flexible on the timelines, and to set up contingencies for emergencies like this in future deals. I also got a reminder about not over-improving a property for the market it's in. It was worth it though, since I learned a ton doing the restoration pieces (not just a rehab) and I was really proud of the end product.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes... me! I'm a licensed real estate agent and have lots of experience with both bank owned and Fannie Mae properties so I was able to easily navigate the process from negotiation to closing. I find some agents locally are not very familiar with how to communicate or navigate in these types of sales, and because I could, I was able to represent myself in the transaction quickly and efficiently.