All Forum Posts by: Pete Fiannaca

Hey BP - 

Find the deals and the money will follow. That's what we've all heard before, right?

Just closed on my newest MFR so I'm not in a great position to go at this deal I found, alone. Numbers are below, but for anyone familiar with the Rochester, NY market, you know that margins can be quite generous.

Single family ranch

4 Bed, 1.5 bath

1,300 square feet

Likely going under contract for $70K

Estimated rehab of $12K

ARV sits at $130k

Conservative numbers would be all in at $82K and a sale price of $130K. 

$130K sale - realtor commissions (6%) - closing costs (2%) = $119.6K

Profit, before taxes, $119.6K - $82K = $37.6K or $18.8K per partner (50/50 split). 

COC return of 22% for a 3 month project (2 week rehab and 10 weeks for list/sale/closing).

Again, looking for a cash partner who could finance the acquisition and rehab in cash. I'd be physically facilitating the rehab, listing and sale. Great opportunity for an out of state investor looking for a relatively low risk venture that doesn't tie up an exorbitant amount of capital.  

Shoot me a PM or leave contact info here if you're interested. Looking forward to potentially building a new relationship with someone!

Best,

Pete

Hey folks - Would love to hear from those who own vehicles that are considered business expenses. Jumping from 1 to 5 units soon and I will be buying a used truck to have on hand for building materials, appliances, etc. What are some things to consider? Any major tax implications? Can I even consider a vehicle a business expense if I'm not considered a real estate professional via the IRS? What if I use the vehicle for business and personal reasons? Hope I can get the basics! Much thanks! Pete

If the match is 100% up to the current federal max, then I would be maxing that out for sure. Even if you take cash out early, the 10% penalty is peanuts compared to the "bonus" match your company is providing.

Something else to think about... If your 401 provider let's you borrow against your plan, then it sounds like after 5 years or so, you'd have a nice little line of credit in the making.

If you're able to through your current lease, get a roommate or apartment mate. Sublet your bedroom and sleep on a pull out couch in the living room. Kill that major expense (rent) and start redirecting those funds to savings/investment. Assuming you live in Sacramento, CA and your lease allows for it, I would be airBnb'ing the sh*t out of that apartment.

I echo the group consensus. 1 day late... send a friendly reminder and look for clarification. If you get radio silence be ready to serve notice. Obviously take care to mind your state/local laws in regards to eviction, but it sure does sound like your tenants may have been talking...

See... I know my wife well enough to know I only had one crack at it, otherwise I'd be toast. Rohn, Ziglar, Brown, Eric Thomas... I had to figure out who would speak to her the best and needed to be sure that the message would hit her square between the eyes.

I told her that, if she loved me, she would do me one favor before dismissing REI altogether; read Grant Cardone's "Be Obsessed or Be Average".

She met me halfway and listened to it on audible (which was wayyyy better anyways) and as she got through chapter after chapter, I could see her eyes light up.

Bottom line... Your girl won't listen to you because you're not an expert. Find an expert that relates to your girl and give it a shot!

Hey BP - 

Soooooo stoked to say that I just had an offer accepted on a 3-unit home this morning. The 3-units are so important to my wife and I in that, 1) it puts us past the goal we set for ourselves on Jan. 1 this year and, 2) while not financially free, it is going to allow my wife to spend a year home with our two babies.

Because I know this community loves numbers...

Purchase Price: $165,000

PITI + 10% CapEx: $1500/Month

Apartment 1: Occupied at $750/Month, Market rent is $800-$825

Apartment 2: Occupied at $950/Month, Market rent is $1000-$1050

Apartment 3: Occupied at $1150/Month, Market rent is $1250-$1300

Projected COC Return, Year 1: 72% (WOW)

Current Net Cashflow: $1350/Month

Three Things...

1) I spoke with all three tenants during my initial walkthrough of the property and they all seem... normal. Weird, right? We hear stories all the time about inheriting terrible tenants, but the ones I spoke with were actually communicative and quite transparent. Knowing that I (seem to) have decent tenants already in place, what are some general thoughts about keeping rents stagnant for a period of time, vs. raising them slightly, vs. any other creative ideas out there. 

2) What have some landlords here done in the past to address the needs of inherited tenants upon property acquisition? I'm a total people person and, though the money is great, I'm really in the business of making people happy and fulfilling a need. It's not crazy for me to order a pizza and wings and schedule a dinner for my tenant and I one-on-one to talk about improvements needed to a property, wish-list items, etc. Anyone here utilize a SUPER personal approach to assessing tenant needs (especially with tenants you may not have placed in a property yourself)?

3) Lastly, just wanted to SHOUT OUT to this amazing community and say, don't ever stop chasing your dreams! Timing and finances were all wrong with this property acquisition, yet everything seemed to work out ever so perfectly. BP Podcasts, blog posts, and books have given us the will to push through some precarious times. Could not be more thankful to the contributing members of this community for, if nothing else, just the raw motivation to take charge of our future!

Go.Get.It.

Pete

Kyle - Glad to see that you're at least testing the waters. Couple thoughts from one newb to another...


1) Even if you're not ready to buy, keep crunching numbers and running deals in your head, on cocktail napkins, in spreadsheets & wherever else you can. Running 1,000 hypothetical deals will only help the situation when you're actually in a position to buy. You'll be more confident and have a much better grasp of what has value and what does not.

2) Most of the guys/gals with a buy and hold strategy are aiming to net $100/door or more. $300/door is nothing to scoff at. That's a car payment, or two, that you're able to "take off the books". 

3) Don't underestimate the power of the house hack. My first deal was buying a SFR about 10 miles away from my home. Small place in a C+ area (but up-and-coming) that nets me $500/month at a purchase price of $72k. That extra $500/month was just what I needed to put some extra money away to purchase a house-hack duplex that I'm closing on in a month (which will give me 4 total units acquired over 2 years and the goal of living rent/mortgage free). Momentum is everything and as long as you're cash positive at the end of the month, it's a step in the right direction.

Good luck to you. Indy seems like a great area in that the barrier to entry is quite low... turn key properties for $50k give-or-take. Happy to chat more if you want to connect!

Best,

Pete 

Thanks, everyone, for the 2 cents so far!

Hey friends. I have sourced 3-4 private lenders (family and friends) who are willing to assist with property acquisition via private loans. This would not be for the whole price of the property, so I'm still utilizing a bank.

Using nice, round numbers, if I buy a duplex for $100K and need 25% down, am I going to run into any major snags if I come out of pocket $10K and a family member loans me $15K, or if I get private money for the whole $25K, let's say? It's great, because I've finally found funds to get rockin' and rollin', but I want to be sure that a bank is going to be on board as well.

Just a bunch of silly, process questions... 

When do I disclose? Do I have to disclose? Bank in first position with private lender in 2nd? Etc... 

THANKS!