All Forum Posts by: Martin Shaw

@James Wise

Gotcha , just curious if any hard money lenders or banks would finance the rehab of the multi -family property if it was "owned" and only needing money for rehab. For a SFH that would be easy to find regardless of experience.

@James Wise

Correct but I was implying that you won’t need “financing” for the purchase and the rehab from an institution or hard money lender for the vacant property. You would only need financing for the rehab since you now have an “equitable” title.

@James Wise

If you own the building outright , either through cash purchase or 100% seller financing, does it make getting financing for the rehab any easier?

@Andrew Freed

Can I see that slide as well?. Trying to scale up quickly as well. I’ll dm you my email.

@Kristi K.

You forgot to add the list.

What are you paying for the 15 unit. Looking at acquiring a 16 unit and just looking for ballpark figures.

@Karen Higgins

Quote from @Karen Higgins:

I'm sure I'm not the only one who has noticed, but insurance rates are bananas right now!  I just got my statement for the upcoming year and the premium has increased 52% over the past 2 years.  I'm looking for any recommendations of insurance companies in Minnesota for multifamily real estate.  This particular building is a 15 unit  building built in the 1990's in great condition.

I'd love to know if anyone has a great insurance broker or company that I should look into.  Thanks so much for any input.

@karen Higgins What are you paying annually for the 15 unit? 

Quote from @Mike Dymski:

Most of us could not rehab units that are gutted to the studs for $15k per unit.

 In-house crew will handle much of rehab not including plumbing and electrical hvac. 

What all-in cost (purchase/rehab/holding cost) as a percentage of ARV is the most you'd consider for a full rehab on a 16 unit multi family that's been gutted to the stubs ( Owner is in bad health and after replacing roof has don't nothing else). Purchase is asking $150k and repair estimates are 250k (included everything possible and then some) for all in at 400k. My deal analysis shows Arv value around $800k plus. Is that spread enough and worth it. After refinance at 75% that's $200k plus a decent cash flow.

Thoughts?  

Quote from @John Casmon:

The strategy works but you need to ask the next question. How do you mitigate risk when using this strategy? Here are three things to consider:

1. Buy low and ensure a healthy spread - You'll want a sizable gap from your all-in costs to your ARV
2. Have plenty of reserves - You won't have ANY cash flow coming in so you'll need plenty of cash on hand
3. Understand refi terms - how long does the lender want the property to be stabilized before they let you refinance?

Good luck!

What do u consider “sizable gap”. I recently ran across a vacant 16 unit for $150k and my renovation budget comes in at $240k worst case scenario for all in at $400k If my arv is $700-800k is that sizable enough. Refinance at 75% would give me between 525-600k, clearing $125-200k. Since it’s a full rehab from the studs I expect maintenance to be low with everything new. Only expenses would be tax, lawn, insurance, common area electric gas and water and property management, lawn care. Still leaves a decent cash flow. Thoughts?