All Forum Posts by: Kristi Kandel

@Account Closed the apartment was vacant the entire time and we were told on our two walkthroughs weeks apart that the reason the tenant never furnished the unit was because he got called away on a construction contract and was coming back in a couple months. Dealing with construction projects and pulling superintendents and laborers onto remote jobs for 4-6 months at a time that explanation made sense. He paid the rent on time and with the exception of the bust there were no signs of funny business or the unit being a stash house. Apparently they pick nicer areas to setup stash houses to not raise suspicion. Another day another property another interesting lesson. 

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

Purchase price: $352,000
Cash invested: $22,000

4unit rental property in Columbus. One of the tenants ended up getting busts by Homeland security 3 months after we purchased the home. They found over 80lbs of heroine and caused about 7K of damage to the property. We were able to repair the unit and now airbnb it for $400 more a month than the monthly rent that we were previously collecting from the LTR rent.

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

We wanted to bring a friend into real estate investing and this deal was perfect for his first investment property.

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

We found it on the MLS and just submitted the full price offer in a very competitive market (deals are only on the market for 24-48 hours) with limited contingencies to get our offer accepted.

How did you finance this deal?

We brought in a local partner who was open to an owner occupied house hack and wanted partners to manage the tenants since this was his first investment property.

How did you add value to the deal?

Put very little cash in the deal and after the Homeland Security Drug Bust of the "stash house" unit we repaired it and converted it to an airbnb within 3.5 weeks of the incident bringing in $400 more a month in rent than just signing up another LTR lease.

What was the outcome?

In the first month of airbnb it seems to be working very well and allows us to give more work to our local handyman and his wife who cleans the airbnb unit. Which works out well to have them frequently at the property so they can pop into the long-term units as necessary for repairs.

Lessons learned? Challenges?

Do a background check of all tenants for any property you purchase even if they have existing leases. While you typically can't terminate leases you do have the choice to walk away from the deal if something sketchy comes up in the background checks. In the end we will make out better from immediately turning the unit into a short-term rental but it was quite the 3-4 weeks of experiences with Homeland Security, FBI, Sheriff's office, handymen, etc.

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

Nope.

Thank you. We are checking with commercial lenders and portfolio lenders now. 

Yes, " A lot of the traditional lenders are passing due to Nevada or not wanting to be the first lender to get in on the tiny home /shipping container movement." About 15 lenders so far. 

Banks don't know what asset class tiny homes fall in so if they have to foreclose they don't know what the buyer pool looks like. 

@Reginald Truss That would be great. I see you're from Ohio and we want to look into it next year in Ohio (we have 4 properties in Columbus right now) after we get Nevada's program up and running. 

We are developing small and large lots of tiny homes (shipping containers) on foundations and are looking for lenders to partner with in the Tahoe/Reno Market. A lot of the traditional lenders are passing due to Nevada or not wanting to be the first lender to get in on the tiny home /shipping container movement. The structures are permanently affixed and you can't just put wheels on the containers and drive away. We have 2-3 small lots for loans in the 275-350K all in cost per lot and one larger 198 unit tiny home development in the Reno market right now with bigger expansion plans once we get the right lenders on board. 

@Jeff Kao we originally intended to do one LTR and one STR and for a handful of reasons we opted for two STRs. We already have a handful of STRs and the team setup to manage them so adding two more to the portfolio made sense at this location. Doubling the rents was a nice bonus.

Investment Info:

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

Purchase price: $223,000
Cash invested: $78,000

duplex with each unit 2bed 1 bath

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

Ability to invest in an area that is rapidly turning around near downtown Columbus

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

MLS and outbid a handful of offers using an escalator

How did you finance this deal?

25% down cash

How did you add value to the deal?

instead of LTR we furnished both units into STRs and doubled the monthly income

What was the outcome?

instead of LTR we furnished both units into STRs and doubled the monthly income

Lessons learned? Challenges?

This was pretty straight-forward. The AC units didn't come charged (we bought it remodeled) but we got lucky that the seller didn't want a bad flip reputation and they reimbursed us for charging the units

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

N/A

Investment Info:

Single-family residence buy & hold investment in Gahanna.

Purchase price: $147,000
Cash invested: $41,000

Single family home 2/1 converted to 3/2 - the SF allowed for an additional bedroom and bathroom if a few walls were moved

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

looking for a cash flowing LTR to invest in

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

MLS and negotiated the seller to the lowest sale price to pay off all of his liens

How did you finance this deal?

Put 25% down as an investment property

How did you add value to the deal?

Removed a few walls to add a 3rd bedroom and a 2nd brand new bathroom.

What was the outcome?

After all of the work was finished we listed it for rent and were able to get a short-term renter whose house burnt down for 6-9 months about $600 over market rents for a LTR.

Lessons learned? Challenges?

Really understand a rental market before purchasing a property. We assumed a lower rent in the initial budget but had too high of an upside. We also spent more on the rehab than anticipated using all of the contingency. However, we got lucky to meet and exceed the upside for the first 6-9 months to build up cushion in the property for turnover.

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

N/A

Investment Info:

Single-family residence buy & hold investment in Columbus.

Purchase price: $43,000
Cash invested: $34,000

Single family home started as a 3/1.5 converted to 3/2. All utilities were disconnected and meters removed. New water main required from the street. All new utilities to the meters, meters set and all new plumbing/HVAC/water heater/etc inside. Complete gut with new kitchen and bathroom and added bathtub to 1st floor bath. Purchased the home inside a Roth and renting long-term for approx 8K in profit or 11.5% cash on cash return annually.

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

I wanted to start investing in properties with my Roth and the price point and ARV / LTR rent values made this home a good option for a first flip.

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

It was listed on the MLS and we negotiated them down a little.

How did you finance this deal?

Paid in cash with my Roth.

How did you add value to the deal?

Completely gutted and remodeled the home and all brand new utilities.

What was the outcome?

Selling didn't make the most sense after listing it for a few months so I changed the strategy to a LTR rental and hold. Since the property is in my Roth there won't be capital gains tax.

Lessons learned? Challenges?

If you're going to do a full gut and remodel across the country have your team lined up first and walk the property prior to purchasing. My 1st contractor wasted 6 weeks doing almost no work which left me searching for anyone who could show up and do the work. So lots of lessons learned but it turned out well in the end.

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

N/A