All Forum Posts by: Matthew Morrow

Hi Andrew,

All of the above suggestions are valid, just do your research and know the risks of each. You also may want to consider investing your cash with another investor / company for the term in some real estate deal that's not yours. This obviously has risks as well, but then your $$ will be making money in real estate and not tied up elsewhere. Also depending on your personal situation / investor credibility you may be able to invest in REITs or other Real Estate related funds of bigger companies. 

Best of luck!

Thanks Bob. We had an itemized list of capital improvements needed which we knew directly affected the value. Ironically several of these showed up on the appraisal. Offer price / seller assist was used to justify doing these within the first several months of ownership. 

All tenants remained in place with new leases, however we went about it with  advise we found here on the forums / podcasts. Each tenant was presented with a rentometer pro report showing market rent. (Each unit was under-rented by 30-40% at time of purchase and on MTM leases.) They were asked then to provide a number in which they were comfortable / capable of paying somewhere between where they were, and where we needed them to be. It was actually quite nice to see how realistic people were. We signed new leases at those numbers as to not rock the boat, but all leases had built-in increases over the 12 month period. Over the next few years, several tenants left on their own terms and we were able to take advantage of the downtime to renovate, and re-rent and market value. 100% rent collection rate thru covid as well. 

Thanks! Total cash invested was 150K including purchase (cash) and renovations. 

Sales price was 230K

Investment Info:

Single-family residence fix & flip investment in Coplay.

Purchase price: $105,000
Cash invested: $150,000
Sale price: $230,000

Off Market, Single Family Flip. Customized and sold to client who was able to pick each detail of the project in a crazy real estate market. No competition or advertising. $80K profit, zero personal cash used in deal.

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

Deal from our home town-

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

Direct mail & door knocking

How did you finance this deal?

Cash purchase / rehab cash from prior deals

How did you add value to the deal?

Massive renovation. Added finished SF, Master bedroom / bath. Flooring, Paint, Lighting, etc

What was the outcome?

Sold to Real Estate client who was able to customize the deal from the ground up without competing in the market.

Lessons learned? Challenges?

Seller passed away 1 week before settlement. Dealing with the estate was very educational and eye-opening.

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

Self Purchased as RE Agent

Investment Info:

Single-family residence fix & flip investment in Coplay.

Purchase price: $105,000
Cash invested: $150,000
Sale price: $230,000

Off Market, Single Family Flip. Customized and sold to client who was able to pick each detail of the project in a crazy real estate market. No competition or advertising. $80K profit, zero personal cash used in deal.

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

Mixed used / multi family was the original goal. This fit the bill perfectly

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

Direct marketing to local owners. Negotiated in-person and appeased their situation.
Seller paid ALL closing costs.

How did you finance this deal?

Conventional commercial mortgage. Down Payment sourced from HELOC. Closing Costs all paid by seller. Zero cash our of pocket into the deal

How did you add value to the deal?

Deferred MX considerations, Massive rent appreciation adjustments to market over 24 months. Remodel / repurpose several units to highest & best use.

What was the outcome?

Still holding property. Appraised at nearly 2X original purchase price, Cash-out refi and rolled proceeds into 7 more doors....all of which are similar scenarios to this with large upside / value add.

Lessons learned? Challenges?

Too many to list. Would love to explain via phone or email lol

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

I am an Agent, and work with investors.

Hi all,

Have a great opportunity in my hometown to get into a 5 unit mixed use property. Seller and I have great relationship and he is willing to cover down $$ and closing costs- but also willing to seller finance the whole deal if necessary to avoid the banks profiting.This would leave me out of pocket with little to no cash- Awesome!

Property:

5 units split between two structures on one deed.  3 residential, 2 commercial 

Current Gross Income is 41K, Net is 25K, placing current market value around $250,000, verified with numerous local sources. 

Rents are all $150-200 below market and there is currently 2 un-rented garage bays and a large 500 SF shop which can be turned into a 4th residential unit- bringing the ARV to nearly $350K.

He has a Home equity loan with a $50 K balance, assuming this would be called due on sale. 

My question: 

How should I move forward being my first owner financed deal. He is willing to take around $1000 / mo or interest only payments for 3 years until I can refi out after rents are raised and value goes up. Owner is asking about how Capital gains tax plays into an owner financed deal- which I couldn't answer.

Does he remain on the deed and our sales agreement gets filed at the county? 

Any help is greatly appreciated. This seems like a huge opportunity. 

Cheers,

Matt

Hey Spencer, Another local guy, i like it. Best of luck with everything, Id be glad to meet up and network. The more the merrier.

Matt

@Matt M.

Nice job Matt. We’re very close- I grew up in Northampton and Still live and work in the Lehigh Valley

Keep it up.

@Ali Boone

Aerospace, I love it. Very nice!

Aeronautical Science for me. Nerds flock together!

Degrees are great for many reasons- but they are much more than a selective educational tool set. It’s a reflection on personal commitment and dedication to something bigger- your self investment. This is not to say those without degrees are not qualified or capable of quality business experiences- rather the opposite is quite true. Some of the best business owners I know are free of a formal post-high school education.

My Bachelors degree is in Aeronautical Science. Then again, I’m a full time corporate pilot while investing and operating in real estate as an agent. The degree provided me with a great foundation of business, management, and of course aviation expertise, but never stop learning.