All Forum Posts by: Kesete Thompkins

Investment Info:

Single-family residence buy & hold investment in Pittsburgh.

Purchase price: $50,000
Cash invested: $8,000

3 bedroom/1.5bathroom Ranch home on a double lot. The solid brick house has an attached garage, driveway, and side yard, located on the Northside of Pittsburgh.

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

The house fit our criteria for price and equity. The initial cashflow did not fit our usual standards, however we know that this house can and will earn us a good amount of cash flow ($400+) within the next three years.

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

I found this deal by running my mouth. I tell everyone that I know that I buy homes. I ran into an aunt at a family reunion and she was telling me about a client/friend of hers who may be selling a rental property she had. My aunt made an introduction and we decided on an initial price with traditional financing. That deal fell through because I couldn't secure financing. Several month later, the buyer returned to me and asked if I was still interested. I agreed, but only on seller-finance terms

How did you finance this deal?

Seller financing with ten percent of the purchase price as a down payment. Monthly installments with a balloon due in 18 months.

How did you add value to the deal?

We brought value to the deal by solving a problem. Once we identified the problem, we knew how to solve it in a mutually beneficial manner.

What was the outcome?

We have a strong relationship with the seller and both parties are happy. We have an amazing family who rents the house, and we are looking to have the house in our portfolio for the foreseeable future.

Lessons learned? Challenges?

1. Have a clear timeline for everything. Work backwards from your expected rental date. This will help you understand what needs to be done and when.
2. Communication is key. Never assume.
3. Solving problems is a win-win for all parties. Figure out what people need vs. what they may want, and you can find a deal.

Thank you again. I continue to learn more and more about this business as I secure more deals. Our accountant continues to push us for W9 information each time we secure a new deal. Whenever you have time, I would like to chat with you to get your thoughts on the Pittsburgh market. We have done a decent job up to this point, but to take our business to the next level, I will need more help and expertise on my side. 

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $70,000
Cash invested: $23,000

2bd/1 bth Tudor Home

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

The price and condition of the house made this deal intriguing. The deal also fit our criteria at the time

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

I found this deal on Craigslist one evening before going to sleep. The seller wanted out of the house and wanted someone to pay what she owed on the house.

How did you finance this deal?

Cash

How did you add value to the deal?

Renovations to the kitchen, bathroom, exposing the hardwood

What was the outcome?

We continue to rent the house to a wonderful tenant who uses a Section 8 housing voucher

Lessons learned? Challenges?

1. EVERY house needs some type of renovation or updating
2. Get a roofer!

Investment Info:

Single-family residence buy & hold investment in Pittsburgh.

Purchase price: $70,000
Cash invested: $23,000

Ranch-style SFH 3bed/1 bath house on the Northside of Pittsburgh
Attached Garage, front and back yard

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

The house belonged to my aunt and she was going to let the house go for the taxes.

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

I lost a deal up the block and I was frustrated. I wanted something in that area and then I thought of my aunt's house. I contacted my aunt and she told me her plan to let the house go for taxes. She was using it as a rental, but it was vacant for two years. I remembered the condition of the house and prayed that it wasn't in horrible shape. I asked her to come up with a number that she'd sell it for and we quickly agreed to a seller financing deal.

How did you finance this deal?

Seller finance deal. 10% percent down, deal financed with 0% interest over five years.

How did you add value to the deal?

We renovated the house, upgrading the bathroom, the kitchen, and the front porch.

What was the outcome?

We are currently renting out the house at a price that's slightly under market rent.

Lessons learned? Challenges?

1. Patience is key. A lack of patience will cost you money.
2. Know what you want before you bring contractors in. They will upset you on what to do if you aren't careful.
3. GET A RECEIPT FOR EVERYTHING!
4. Get concrete quotes and a clear itemized scope of work from your contractor. If possible, get a price breakdown for each project on the job.
5. Make sure your contractor can show you examples of his/her work.

Investment Info:

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

Purchase price: $35,000
Cash invested: $10,000

Duplex purchased in 2017 that currently needs to be renovated. Each side is a 4 bedroom/1 bathroom with original hardwood floors, pocket doors, and large rooms. There are thoughts of making this a rooming house where we will rent by the room, or renting to a family in need. We are also considering renting this to a low-income family.

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

My wife and I were interested in this deal because it's on the Northside of Pittsburgh where I'm from. I know the area really well and there are plans for MAJOR development (The Esplanade) in the upcoming years. In addition, this property gives any tenant immediate access to the highway and can get one to the casino, Heinz Field, and PNC Park within 10 minutes. Also, this was our first deal as an official company, so we had to grab the deal.

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

I found this deal one night on Craigslist. I kept seeing the property every night that I opened Craigslist. I knew the location but I was scared to call on it. One day I decided to call and talked to the wholesaler who had it under contract. Ironically, I knew the wholesaler from high school!!!! In regards to the negotiation, the listing price was $40k and we got it down to $35k without much hassle because he remembered that our interactions 17 years ago in high school were respectful.

How did you finance this deal?

Cash from stock investments.

How did you add value to the deal?

We plan to add value through a complete renovation (New EVERYTHING)!

What was the outcome?

We are still looking for the financing to complete the renovation. We plan to focus on one side first, rent that out, then use those profits to fund the renovation of the other side.

Lessons learned? Challenges?

Tons of lessons learned here!
1. Don't bite of more than you can chew.
2. Project management matters!
3. You need a budget to ensure that you are not spending money in the wrong place.
4. You need a reliable CONTRACTORS to ensure that you can get solid bids to complete the work to your specifications.

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

N/A

Anthony, THANK YOU! I'm going to work on that part of my credit profile to ensure that I have a strong application when the time comes to get that HELOC. I figured that any bank would be inundated with requests, so it may be in my best interest to wait anyway.

I'm going to do some of the work myself in the mean time and continue to save where I can. 

Good luck with your current projects. 

I have a property that I need to refinance or get a HELOC on (I prefer a HELOC). I'm in the Pittsburgh, PA market and I'm not getting the response I need from the banks I've contacted for several reasons. Some of the reasons that I've heard include:

1. My credit score is in the mid 700s but my debt-to-income ratio is too high.
2. It's an investment property.

The property has about 90k in equity and I need it to fund a couple projects I'm working on. I'm looking for a bank or credit union to partner with. Does anyone have a lender they've worked with that they can recommend? 

Any help from the community would be appreciated. 

Thank you.

Gino, thank you for the insight. This is my first offer like this as I mentioned earlier, so I want to get it right, and your insight has helped tremendously. I'm going to speak with the realtor Monday to get more information so that I can understand exactly what the seller is looking for. From what I understand, the seller is motivated, however I'm not sure if it's a dire situation with limited options. I'll let you know what I gleam from the realtor and run my numbers by you to see if it makes sense. 

Thanks again! I'm hoping that I can get this thing done so I can really venture in commercial units on a larger scale. 

Have a great weekend.

Kesete

Hello all. I’m working on making an offer for an apartment building where the seller is offering seller-financing. I am trying to think about how to structure the offer, as this is my first time dealing with this type of finance option and my first time working to acquire a commercial property. Any help with how to structure this offer/deal would be extremely helpful. 

Thanks! 

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