All Forum Posts by: Kevin Lee

Hi BP community - I just purchased my second property and I am excited to finally share the details of my first property. 

Before I get into the details of the property, I want to remind everyone that not everything goes as planned and that you need to always move forward and not get stuck over analyzing or get discouraged because an offer was declined. Before I purchased this property, I had multiple offers declined, two deals that fell apart the week of closing (including one where it got messy and I almost lost my down payment).

Now for for the details of the purchase!

• 2 family
• 5 br 2 ba (2 br & 3br)
• 2426 sqft
• Purchase Price: $514,000
• Purchase cost: $35,842.79 (Including closing costs)
• Renovation cost: $17,409.44 
• Total Cash: $53,251.79
• Financing: Conventional loan with 5% down (owner occupied)
• Closed May 2017

Since this was a owner occupied property, I lived in the unit with 2 bedrooms and I had a roommate for a couple of months before he moved out. Instead of finding another roommate, my girlfriend moved in with me and I decided to eat the costs to keep my business balanced (about $1000/mo out of pocket vs ~$200 when I had a roommate). I did refinance once about 6 months or so in and that helped me reduce my monthly payments by over $100 while costing me nothing out of pocket.

Fast forward a couple of months - I have another multifamily under agreement in June, with a closing at the end of August (woohoo!!). This was super exciting to me because this was my vision from the start. Before I even bought my first property!

Current Financials of the property:

• Unit 1: $1900 (previously $1400 from the last owner)
• Unit 2: $2500 (previously $1900 from the last owner)
• Mortgage payment: $3100 (Including PMI, taxes, insurance)
• Water: ~$70 (avg)
• Gas: ~$75 (avg)
• Cap-ex & repairs: $300

This leaves me with roughly $4400-3545 = $855 in cash flow/mo!

Cash on cash return: 19.27%

I have moved out of my first property and into the new one and this helps pay for my living costs. Hope this helps inspire some people!

Hi everyone, I am in need of a contract around the Boston area (specifically Malden). I need structural repairs done on the outside of the house. The rear egress is not up to code. The stairs are too narrow. If anyone knows of a contractor who does this type of work please let me know. Will probably need to tear down the existing stairs, build a new one, and refinish the porches that it is connected to. Kevin

Hi all,

I'm looking to close on my first property in two weeks. Anyone from the Massachusetts area have any recommendations for home insurance?

I'm looking for something at a competitive price...

Hi,

Does anyone have any recommendations for a home insurance? I'm looking to close on my property in Malden, Massachusetts in two weeks. 

Any recommendations? I'm looking for something at a competitive price...

Hi Patrick, Thanks for the advice and estimate. We are going to renegotiate the p&s and ask the seller to fix it before close or to deduct that amount from the buying price. Let's see how that goes... Worst case scenario would be that I walk away from this deal.

Hi everyone,

So I'm in the middle of purchasing my first multi-family house and just had an inspection done this week. There was one big issue that came up during the inspection. The egress (emergency fire exit) for both units are not up to code because the stairway is too narrow. The P&S is supposed to be signed on Tuesday, but I want to renegotiate the terms depending on how much it will cost me to get this up to code. I would imagine that the cheapest solution would be to demo the whole egress exit and build a new staircase.

Does anyone have any suggestions on other ways this could be done? How much would the estimated cost be? Will this even pass an appraisal if they do knock a certain amount off the buying price?

https://drive.google.com/open?id=0B1EAUCYNiyE9dW1N...

Hi David/Andrew

I've attached a screenshot of my calculations. Yes I plan on living in the 2 bedroom with a roommate and renting out the 3 bedroom. There would not need to be much repairs done on the property, except maybe adding new appliances which would demand higher rent in the area.

My calculations are for after 1 year when I move out. I expect to get atleast 1650/month from the 2 bedroom and 2000/month for the 3 bedroom. This is also with me factoring in 11% for property management, however, I plan on managing this one myself. Utilities are paid for by the tenants.

Let me know what you think. @David Zheng @Andrew Beaver

Hey Andrew,

I'm taking out a Mass loan which only requires me to put down a 5% DP with lower interest rate. For my first year, I wouldn't necessarily cash flow. Possibly only a little bit if I live with a roommate. The idea is that I would have my tenant in the other unit pay for most of the mortgage and after a year I move out and rent out both units.  

I ran my numbers with both of the units rented out and included the vacancy rate, cap ex, repairs. All utilities will be paid for by the tenant. Message me if you want more details.

Kevin

Hi everyone, I just got my first home offer accepted! It's a two family house with 5BR 2BA. It was listed at 400k and I offered 410k because I thought it would be competitive and because after using the BP calculator I figured I could live in one unit and rent the other one out and have that pay for most of my mortgage. After a year I plan on moving out to reap in the cash flow. It's located in Malden, MA. Please let me know what you think! I have an inspection set up for the place coming up. http://www.zillow.com/homedetails/56523285_zpid

@Jason Li - Wooohoo!! Was wondering if there would be any BP members on this forum from Newton, but I never guessed we would all be alumni from the same school as well. I will definitely let you know if I have any questions! I am sure I will have plenty :)

@Lior Rozhansky Thats what I like to hear! Please let me know how your first real estate investment goes. I hear that is always the most memorable one for most people!

@Taylor Johnson Wow! Thats amazing. I will definitely be reaching out for some advice and I will check out Boston Wealth Builders as well. I've never heard of it but I will find out more! 

@Yatznira Rodriguez Thanks!

And once again thank you all for the very warm welcome. It feels amazing knowing that through my first post on BP I have this type of support and people who are willing to give advice to someone like me. Very excited to see where this takes me!