All Forum Posts by: Matt Charette

Thanks @Torrell Palmason, that helps to clear it up! 

I’m not sure if this post will break rules on posting so apologies if it does and it’s too specific. 

I’m looking at purchasing a property with 2x single family homes on it. The problem is that it’s failed Title V, has two cesspools. Obviously this won’t fly with traditional financing unless it passes. It’s being sold As-Is so that won’t happen. 

My plan is to owner occupy one of the houses, I’ll have to sell my primary in the process. The PP will be around $500k and I’m estimating $30k for the sewer connections. 

My questions and challenges are as follows:

I’m struggling to find hard money lending for owner occupied properties. Yes it’s a repair/renovation but I need to only get across the finish line to meet the compliance repairs to move to traditional financing. Do these exist, what should I be googling specifically to find them? Can anyone recommend or point me to one?

Can I get a quote for this repair when I don’t own the property already? I’d assume so since it’s such a implicating requirement on the sale of the property.

Is it hard to get a mortgage and get out of the private money once it’s complete?

if anyone has done this before I’d LOVE to pick your brain.

If anyone has any info on what they might think it would run to do this repair that would be helpful as well. One home is directly on the street, the other is probably 150ft away. I don’t know if cesspools need to be cleaned up and removed in this process. 

@Steffie Marthasari@Brad Taylor the purchase experience with Roofstock. Was good, but not great. They weren’t the most responsive during the process which left it to me chasing items and getting clarity. It took 3 weeks to get the appraisal done and that kept pushing out the closing. Now that could be a local issue, but to me it felt like they weren’t motivated to push on a resource to get it done. 

Would I purchase through them again? Sure. But I know and feel like all of responsibility is on the buyer (as it should be) to do the due diligence. No one is going to care about your investment more than you. A lot of the properties on there have inflated prices and sit for a while. I’m more interested in multi families and Roofstock is far more geared to SFRs so it’s unlikely I’ll find another deal through them. 

Hey @Steffie Marthasari! I did go through with closing and I’m two (on time) rent payments into the property. So far so good! Rent is $1170, mortgage $500, property management is 12% which is high I’ll re-evaluate that at year end most likely. Tenant pays all utilities, so I’m cash flowing $530, but I count it closer to $300 to allocate that remaining $230 for maintenance and capex. 

I’m closing on my cash out refi on my primary residence on Friday and will be using g that to purchase the next, so I’m definitely all in!

Hopefully you’re ready to get your feet wet!

@Jen Arizmendi Thanks. I have reached out for more details and proof of rents and utilities, but I haven't heard back yet where initially  he was very responsive. It's either very telling or he may be working with someone else now.

@Paul Moore thanks for the feedback! I had the same mindset of at least get it under contract, get my foot in the door on the deal. At the very least, you're right, it's a learning experience. 

@Jaron Walling totally agree. I’d have my local property manager walk it on video to get a better understanding. The current photos look 60% updated, but it’s not showing all of the units. I’m sure they are hiding some blemishes. 

I’ll have to push back for firm answer and documentation. That’s the only way this can work. 

It’s in the South Bend area, so it’s not super low priced property, but I’m confident a he’s fluffing the rents. I was able to find some listing history for rents there and they’re looking like $50-100 lower to his claims. Even with that in account the numbers still work. Just have to keep digging and see if I need to walk away. 

@Jonathan Greene technically this is a 5-unit. It has the two efficiency apartments, a studio, a 1bd, and a 2bd. I don't intend to BRRRR, that's not my approach. Strictly buy and hold maintaining equity in the home.

I don’t see how cap rate doesn’t apply to every property, it’s a metric. I used it as a way to filter and find my deal (Also never been to it in person). Maybe it’s just your philosophical method as it sounds like  BRRRRs are your approach when speaking of future refis. Maybe you can explain why you wouldn’t use it for me to better understand your stance. 

It’s certainly a Frankenstein! Up front I am short on pictures of the full place to piece it together. However I could get it under contract and have my property manager check it out on a live call. Physically being there doesn’t concern me, as long as I can get the video or walk it virtually I’m covered. 

The handyman piece is also concerning, I doubt the owner has anything legally written up. But, his lack of structure and mismanagement can make this a great opportunity. I have to look at the positives. 

@Anthony Watkins - I did buy this sight unseen. However, there were already two inspections performed with TONs of photos. After my offer was accepted I had my inspection done, so I get comfortable having seen it all the best I could without jumping on a plane. Otherwise I had no prior connection to the area. The numbers worked on the property and I liked what I saw on the data population-wise and percent of renters being ~50% - that’s what helped me choose the market. As for property management Roofstock will list some options in that market that they’ve vetted, but it’s not all of them. I called a couple real estate agents to see who they’d recommend to figure who was respectable and who had a well run operation. 

@Chris Frantz thanks, I might have to take you up on that offer! Hopefully my property management does their job well and it doesn’t come to that though 😊