All Forum Posts by: Nicole Skorka

I found a duplex listed at $95k in South Dakota that needs quite a bit of work. New roof, siding, balcony, both kitchens and both bathrooms. It's currently 4/1 top, 1/1 bottom. The bottom unit can be converted to a 2 bedroom. When the rehab is complete I will be able to get $1650/mo gross and $180k ARV.

Given the amount of work needed, I am going to offer $65k, 20% down, $1k earnest money. Property taxes are $1880, and I'm waiting on the insurance quote. The acquistion mortgage rate quoted is 5%/30 year, and doesn't include rehab costs. I can put in $50k max out of pocket for rehab.

Once the offer is submitted and hopefully accepted, the inspection and appraisal will be completed. At the same time I'll get bids for the roof, exterior, and interior. The units are both occupied for the next 6 months so I won't be able to touch the interior until the leases are up. This will prevent me for refinancing later than I'd like.

I'm worried that I'm going to get myself stuck and not able to cash out and work on the next deal. If I just do the roof and maybe exterior, I won't have the equity I'm hoping for but will still have tenants.

Thoughts, experience to share?

@Jeffrey Martinez-

To tap into your equity, either cash out refinance or get a HELOC. Use that capital as down payment to purchase your next investment or partner with an investor. There are many options on how to best put your money to work. The path you take depends on your goals.

Seeking partner for acquisition funding of 11 unit apartment in Deadwood, SD. Units are mix of 2 bedroom, 1 bedroom, and studios. Nearly turnkey with only light remodeling needed.

Need partner to bring 20% down ($80k) in exchange for 80% net cash flow for X years, until property is cash-out refinanced. Mortgage can be in name of partnership or in my name. My credit score is 760.

Anticipated gross monthly rent is $3200 with net of $1600.

@Geoff Van Dusen - It's been a few years since this post. Have you found quality lenders in SD that you would recommend for buy and hold with needed rehab?

@Tom Fidrych, doesn't matter how far away you are. Let the PM know that the lock is a potential fire department violation and that the deadbolts need to be swapped out as you described. You might need to pay a restocking fee, labor, and cost of the new lick but it's better than being sued for negligence when someone dies or is injured and can't escape a fire.

Why are you afraid of your PM? Tell them what to do and as your agent, the need to do it. Any push back is a red flag that you need a new PM.

@Cassandra Kaise

Your closing document should include executed copies of leases, executed estoppel certificates, and escrow of deposits. Your attorney should know this. If the closing documents are missing this documentation reschedule the closing or cancel the deal. If you move forward as-is, it sounds like you have more legal issues in your future and eviction plans.

Best wishes, please let us know how everything goes at 4pm.

@Tony T. The CapEx and OpEx to maintain will be high, and most prospective tenants will request a large TI allowance. $100k sounds great but do your DD and think about finding a wealthy business partner or capital investment company who is well connected and sees the benefit of preservation and community development. Also remember, you need to have funds while it sits vacant, which in commercial can be a very long time.

Given the area you described, it might a good location for a non-profit incubator. Think coworking but for social enterprises and non-profits only. We have a couple incubators like this in Denver that do well and given their mission dont have to worry as much about competition like WeWork. This isn't a turn key opportunity but could be very rewarding and help make a name for yourself.

@Alan Brown Do HMLs exist in SD? When digging through the BP marketplace there are lenders listed for SD but once you go to inquire or browse their website it mentions that they are not licensed to service loans in SD.