All Forum Posts by: Nick Maugeri

@Dan Heuschele that's the plan and exact mindset I am approaching this with. Thanks again, very valuable insights

@Lance Castillo I am using a contractor and realtor as a go between for showings, lease signings, and key transfer. Also, I am using cozy.co to manage from afar, except on this deal. This particular tenant is old school and wishes to Mail a check every month. There has been no issues so far using this method and I have coordinated with the tenant and my contractor via phone to do some deferred maintanance.

@Dan Heuschele I absolutely agree, that's why I chose to honor the existing lease - she has been a good tenant for the previous owners. However; $300 below market is too great of an unrealized gain. I think in this particular instance, customer acquisition cost and tenant turnover will be worth it in the end to get the property at least $100 below market rents.

Thanks so much for your response and insight 👍

@Maureen McCann yes, definitely can offer some insight. Thanks for the response on this 👍

Acquiring three deals this month has been a well fought effort. Two of them financed conventionally at an 85% LTV and one that was acquired with a five year lease option. It has been great underwriting these deals and negotiating them heavily, along with building relationships with the team members you want to pick. Although relationships are one of the most important aspects of REI, cash is certainly second to none. Analyzing incredibly cheap opportunities with huge value add opportunity is super frustrating, I do believe that the fortitude I possess will prevail. I have quite a few high return commercial properties in the pipeline with, now, little cash to close them out. Boy oh boy, they said this would be difficult - but I certainly do enjoy it.

Investment Info:

Single-family residence buy & hold investment in Alexander.

Purchase price: $143,000
Cash invested: $1,000

Single family home that was built in 2017. Purchased with a 5 year lease option to purchase from seller for existing payoff amount. Amount invested includes notary fee, utility turn on, and $400 in deferred maintenance.

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

Helping out the seller and acquiring property with almost no money that turns into instant cashflow

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

Local realtor, negotiated by mutual interest with seller - directly.

How did you finance this deal?

Five year lease option to purchase with the ability to lease to potential buyers or tenants.

How did you add value to the deal?

Very little money invested and instant cashflow.

What was the outcome?

Cashflow with a 100% ROI.

Lessons learned? Challenges?

You have got to do the leg work in these types of deals. The seller has a headache and they want to do as little as possible. If you have most of the answers, or are willing to find them, the seller will be more willing to work with you.

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

Absolutely.

Investment Info:

Single-family residence buy & hold investment in Benton.

Purchase price: $65,000
Cash invested: $14,000

Single family buy and hold residence. Purchased with no tenant, that had previously rented at market value.

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

The property had been on the market for a substantial amount of time - vacant with little deferred maintenance.

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

Realtor.com and local real estate agent. Asking price was $79K, negotiated vacancy and deferred maintenance down to $65k.

How did you finance this deal?

Conventional with 85% LTV.

How did you add value to the deal?

By buying the property below market value, it will appraise at an amount high enough to pull our initial investment out in full.

What was the outcome?

Holding and renting.

Lessons learned? Challenges?

Negotiation skills are paramount in the success of real estate investing. Solving issues for the seller carries a lot more weight than it would seem at face value.

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

Absolutely.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $90,000
Cash invested: $15,000

Our first out of state buy and hold. Purchased with an existing tenant and currently honoring a lease that is $300 below market value. A new lease will be established to the realized market rents. Realized cashflow in year two should be $500 monthly. This was a safe investment, but it got the ball rolling. With appreciation, we should be able to refi and pull out quite a bit of our initial investment.

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

Safe and stable, with existing tenant and new roof - unrealized cashflow in this property was the most appealing.

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

Local realtor, who is the best, negotiated by offering multiple offers on one property.

How did you finance this deal?

Conventional finance at 85% LTV.

How did you add value to the deal?

Raising rents after existing lease expires by $100 after first 8 months of ownership.

What was the outcome?

Buy and hold long term.

Lessons learned? Challenges?

You have got to have persons that are competent, willing and able to operate in an effective manner, that are willing to operate at your standards.

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

Absolutely, any day of the week.

It could be interesting to get a new investor on the podcast to ask a ton of questions. It could help a lot of other new investors, but it might also help seasoned investors communicate to those they are trying to help get started. 

@David Weintraub, thanks so much for your help. That makes a ton of sense.