All Forum Posts by: Nick Reinhardt

Looking for some input on a potential deal.

Property Description

8 townhomes consisting of 4-3/2’s and 4-2/2’s. The property is partially completed, exterior, windows, insulation, electrical, drywall are complete. All other interior work is not completed.

The property went into foreclosure and is currently owned by a local bank.

Numbers

Purchase Price - 150k/unit x 8 = 1.2

Est Remaining Construction - 50k x 8 = 400k. This is an estimate based on the information I currently have. I plan to walk the property in the next few days to get a more accurate estimate.

Total Cost - 1.6, this does not factor in closing or carrying costs as I don’t have that information at this time.

ARV - 250k/unit = 2m

Rents - Avg. 2,000/unit x 8 = $16,000/month

Questions:

- What type of lenders and loan products would work in this type of situation. What are the requirements (LTV, rate, terms,etc)

- What are the risks

- Does anyone have experience with this type of property 

Hi All,

I'm looking for advice on financing options for a vacant duplex, as well as how to talk some sense into the owner.

Here is the background. There is a duplex next door to two other duplexes I own that has been vacant for at least 3 years. The outside of the property is in pretty good condition, I have never been in the property but from pictures and experience with my neighboring units estimate the renovation budget to by about 80K.

I have spoken with the owner every couple months since last summer inquiring on her plans with the property, and to let her know my interest. Her plans as of last summer were to renovate by the fall, and list the property for 500k. Fall has came and went, no work has been completed, the property is still sitting vacant. I just recently reached back out to her to see if her plans have changed, she now is looking for a cash buyer at 375K, or will still plan to renovate if she cannot find a buyer. The home is not worth 500k, the highest comp in the last 6 months was 450k.

Questions

-To put it simply, what is she waiting for? Rent it out, fix it up, sell it, do something....

-Why is she looking for a cash buyer? I would assume do to the condition of the home a conventional lender may not lend on it.

-Ideas on how to approach this? We are quite a ways apart on what the home is worth, how would you work on setting more realistic expectations?

I don't have 375k cash, and wouldn't pay that, but I have a private lender lined up that would fund the acquisition and rehab. To make this work the purchase price would have to be around 265-275k.

My second thought, and my preferred path is do a conventional owner-occupied loan. In which case I would be willing to increase the purchase price to 325ish.

Thoughts?

Thanks in advance.

@Michael Ringler

Propstream.com

Whitepages.com

The county the property is located in should have a county website.

If you enter the address in any of these three you should be able to get the property owner. Propstream and whitepages are paid sites, but can provide the owners contact information, mortgage information, and other info that is beneficial.

Another benefit of propstream is you can create list for a certain area, based on certain criteria without having to physically drive by the house.

@Anthony Buccanero

Hi Anthony,

My wife and I are also located in the Twin Cities, and relatively new to real estate investing. We currently have 2 duplexes, which we self manage. From our experience It’s been beneficial to invest locally while we learn the business. Things come up, you over look things, and for us it’s been more manageable to be close to our properties while we get them stabilized. I’ve heard the argument that long distance investing forces you to create scalable systems. I definitely don’t disagree with create efficient systems, but I do think there is value in learning hands on until you have “proof of concept”.

Anyway, best of luck, feel free to reach out with any questions. It’s exciting to get going, and get your hands during.

@Lee Syndergaard

Hi Lee,

MNRei has monthly meet ups and other events related to Twin Cities real estate. You can find the calendar of events at MNRei.com. They also have a Facebook group that offers good networking opportunities.

Closed on 2 neighboring duplexes, 4 total units for my wife and I first investment properties. Thanks to our awesome Relator @BrookJohnson for leading us through this process. We will be house hacking one property, and have renters in place in the other property. One unit is currently vacant as the tenants moved out September 1st. Looking for any property management tips regarding new tenant placement and managing current tenants.

@Kyle Meyer What about new accounts added in the last few weeks?

I recently created a Cozy account and I’m being directed to apartments.com where the maintenance request functionality is not available.

Are you able to share the timing of integrating maintenance requests to apartments.com?

@Ryan Howell This is a buy and hold investment. The property will cash flow from the start, and appraised for 15k over what we purchased it for. The units in good condition but I think the updates address some of the biggest issues tenants have with the home. Opening up the floor plan, adding storage, and making the home more functional should help attract and retain tenants, while adding value to the property.

I'm calculating a 25%ish ROI on the rehab, is there an ROI number you aim for when assessing improvement projects on your properties?

@Brooke Wilson The 6 week timetable is conservative, there are some unknowns without having walked through the renovation in the unit. Your right though this is a pretty light rehab and could be completed ahead of schedule.

@Matt Stricklen COVID’s the great unknown, it will be interesting to see the trend with unemployment and the effect that has on rentals. To this point the real estate market has not been effected in the Minneapolis/St. Paul area.