All Forum Posts by: MIlton Monzon

 @Malcomb Stapel. Thank you! Yes RCN capital is a HML. Have done 4 deals with them already since I began in September. Christine Naidoo is my go to. Yes feel free to reach out with any questions you may have.

Quick summary:  After building a relationship with them (so I thought) I gave them this bigger project.  Even though they had done 3 for me already I still interviewed various contractors for this rehab and my go to guys were giving me the best qoutes.  So I went with them.  Everything was going well, they got permits pulled, sending updates daily, etc.  I continued to see them posting their work and now others began reaching out to them.  

Ultimately they took in too many jobs and with my big project they pushed it to the side and got overwhelmed with multiple jobs.  I messed up by lowering my own rules and gave them almost 75% of the money before I can left confirm it was completed.  (I messed up by thinking I could trust them at this point).  So eventually they ran off with 22k worth of materials and work never completed and what was done was very poor workmanship.  

They completely ghosted me, lawyers said it would cost 5-10k to even begin the process, and the city continues extending the contractors listing on the city because if he replies to them within 10 days of initial contact they have to give him another 10 days to respond so apparently he's been responding on the 9th day even time lol.  Anyways I had to pay another 25k to another contract to finish this project and another that I will post later but that's pretty much what happened.  

Investment Info:

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

Purchase price: $173,000
Cash invested: $77,000

One of 4 units was burned for this property. Needed a total gut and everything done to it including siding, windows, sump pump. I bought it with the roof completed so that was a plus. Wholesale fee of 13k and a contractor scamming me. Tons of lessons on this one. 3/4 units were empty needing a full remodel. Got it done and now all fully rented and modernized. Expected a 260 ARV and the appraisal came back at 319k. Got all my invested money in and more to reinvest and still have cashflow.

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

I was intimidated by fire damaged properties but the numbers made sense and I took the risk. Def had a few anxiety attacks taking the leap. Turns out the biggest risk here was not the fire damage but the CON-tractors that stole approx 22k. Had they not I would have only used 55k of the 77k listed.

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

Wholesalers given to me from references. Biggest thing was networking and being the first one to be given the offer was a plus. Being an out of state investor having a well established team was critical. Luckily to start off I had that with my agent, property management, etc.

How did you finance this deal?

RCN capital was a huge help for this deal. Could not and would not have done it without them.

How did you add value to the deal?

Remodeled all units with LVP, stainless steal appliances, electrical, plumbing, and lunar paint throughout.

What was the outcome?

Tenants that met all the rental criteria, support from the community, debt paid out.

Lessons learned? Challenges?

This one is tough. The contractors that scammed me had already completely 3 other projects for me and did a fantastic job. I even took them out to dinner when I visited. I interviewed them, had referrals, checked their EIN and records, etc. At the end of the day I still got scammed. Then they did it to a lot of others in the same time frame.

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

Yes Brenda Engel from New London Ct, amazing agent and RCN Capital.

Investment Info:

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

Purchase price: $173,000
Cash invested: $77,000

One of the 4 units was burned for this property. Needed a total gut and everything done to it including siding, windows, sump pump. I bought it with the roof completed so that was a plus. Wholesale fee of 13k and a contractor scamming me. Tons of lessons on this one. 3/4 units were empty needing a full remodel. Got it done and now all fully rented and modernized. Expected a 260 ARV and the appraisal came back at 319k. Got all my invested money in and more to reinvest and still have cashflow.

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

I was intimidated by fire damaged properties but the numbers made sense and I took the risk. Def had a few anxiety attacks taking the leap. Turns out the biggest risk here was not the fire damage but the CON-tractors that stole approx 22k. Had they not I would have only used 55k of the 77k listed.

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

Wholesalers given to me from references. Biggest thing was networking and being the first one to be given the offer was a plus. Being an out of state investor having a well established team was critical. Luckily to start off I had that with my agent, property management, etc.

How did you finance this deal?

RCN capital was a huge help for this deal. Could not and would not have done it without them.

How did you add value to the deal?

Remodeled all units with LVP, stainless steal appliances, electrical, plumbing, and lunar paint throughout.

What was the outcome?

Tenants that met all the rental criteria, support from the community, debt paid out.

Lessons learned? Challenges?

This one is tough. The contractors that scammed me had already completely 3 other projects for me and did a fantastic job. I even took them out to dinner when I visited. I interviewed them, had referrals, checked their EIN and records, etc. At the end of the day I still got scammed. Then they did it to a lot of others in the same time frame.

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

Yes Brenda Engel from New London Ct, amazing agent and RCN Capital.

@Andrew Postell  Thank you for your reply.  That  is a very good point.   I will def keep that in mind.

Yeah so the lender I have done a few deals with offers a no cash out refi at 80% ARV and for a cash out refi max they would do is 75%. Threw me off too because I would love a 80% cash out refi.

@Sergey A. Petrov thank you for the reply.  That is a good point and it’s been 4 months. I am planning to refi around November/December time frame. Lenders I’ve worked with don’t require a seasoning period fortunately.  Have you had luck or positive experience doing a heloc on a property under an entity?

Good Afternoon BP team,

I have a big decision to make in the near future for one of my current rehabs.  I am going to get some recommendations with the current rate trends/ potential turn in the future. I have a 4 plex that I purchased at 173k with 1 tenant in place and now has 3 tenants in place with 3 of 4 remodeled units and 4th one finishing up this month.  Work after being scammed by a contractor (following all the due diligence steps i could have) was about 90k.

This property cash flows a lot right now with just the 3 of 4 tenants. Once fully done will most likely appraise north of 400k considering other comps. So the options here are:

1) should I do a cash out refi with current trends but be stuck with a high interest rate since it's an investment property and under an LLC (with buy down I'm looking at 7.5%). I would be able to pull 75% of the appraised value and get all my money back and have approx 40-50k more to reinvest. However cash flow would still be there but probably below 1000$ after all expenses and PMI. Cash out would be about 300k.

2) should I do a straight refi (currently in a hard money loan at 9%) at 80% with no cash taken out and let the property continue to bring in 2500-3000 a month after expenses? Still would be at about 7-8% interest rate after buy down and with 700+ credit score. However this PMI will only be with a balance of 195k since HML put up some of the rehab costs.

Concerned of cash out with high interest rate and potentially being able to do it in the next 3-10 years with a smaller interest rate in the future. Also concerned of leaving so much equity in place during a potential opportunity to stay in the game while others are away.

I appreciate any feedback and any of you that read my entire post.

Very Respectfully,

Milton  

@Connor Hubbard hope you are doing well. I’m in mobile now. You have time to link up?

Hi @Stacey R Simmons I am interested. Can you please reach out to me.

@Michael Noto Thank you! Next step is to build up some more money for the next deal and find a great buy and hold with a BRRRR opportunity. Should take me about 3-4 months before I'm ready to search again but pumped.

Investment Info:

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

Purchase price: $132,000
Cash invested: $36,000

Very good condition older duplex in Connecticut. Inherited tenant of two years with very positive background and history and wanting to stay even with market rent increase. Generating great cash flow with a 16% COC return. Blessed with a fantastic agent who was there during the long distance investing obstacles. Goal is for long term hold and continue to grow for more near by.

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

Reading all the forums and seeing all the success investors are having in the bigger pockets groups. Already had experience with a single family and a condo. Wanting to expand my real estate portfolio.

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

Found it through agent referral when original buyer backed out. Negotiated 13k off asking price. Originally offered 25k less but they countered meeting us in the middle. Ended up appraising 3k more than negotiated price.

How did you finance this deal?

Private money for downpayment and bank loan.

How did you add value to the deal?

It does have knob and tube wiring so electrical update will be happening in the middle of 2022 but that helped negotiations.

What was the outcome?

Able to raise rents to higher market rent and have a property ready for move in.

Lessons learned? Challenges?

Consider closing cost to be higher than calculated and expected. Closing cost came in 2k more than I had budgeted for but luckily I had reserves to cover it.

Challenges would be being patient with oneself and the process. Took 45 days to close and throughout the process when asking questions there was a lot of silence from the lender and seller when important stuff came up. Luckily the lender would follow through with everything they promised.

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

Worked with Brenda Engel an amazing agent especially as an investor and RCN capital for lender. They were great to work with and follow through on their services.