All Forum Posts by: Matt Pastier

@Zac Boelkow My last 3 vacancies were all in mid to late winter. I didn’t have a problem getting them rented. There’s a lot of variables at play, but if you have a solid way of attracting and placing quality tenants I don’t think the time of year will hurt you.

@Yonah Weiss Mine is in criminal justice. I initially wanted to go to law school, but did an internship and ultimately decided against it. I’m now in sales management for an Ed tech company.

The degree gave me the confidence that I could accomplish something big, but it’s my day job that set me up best for RE investing. It’s taught me lots of skills that transfer to real estate, and provides performance bonuses that I can invest in deals. It’s been an interesting path I stumbled upon!

@Anthony Gayden You had an inspection contingency so there is nothing wrong with renegotiating the price. I had this happen a couple of months ago with a property being sold “as-is” because it had been vacant. A couple of major items were found during the inspection that would have cost about $15k more than I planned. I only asked for the reduction in price so there was no work on their end. They didn’t agree to the price so I walked away and got my earnest money back. It was no longer a good deal.

If they aren’t willing to negotiate and the $3k doesn’t really impact your numbers you could still move forward. It doesn’t hurt to ask.

@DMikal Mitchell I think you have a great foundation and plan for starting your search. My first BRRRR was also nerve-racking throughout and I questioned myself at times. I don't think that's a bad thing! Here are some things to consider that might help you move forward:

- Be conservative on your numbers and don't force something to work. My realtor said my BRRRR ARV would be around $80k. I ran all of my numbers at $70k to have a cushion. I made sure that even if I appraised at $70k I would still be ok. How much of a cushion you use is your call, but it will put your mind at ease that you have room for unexpected expenses. There will definitely be unexpected expenses and things will definitely go wrong. It's just a matter to what degree. That's the learning process. But, if you build that variable into your numbers you'll likely be fine.

- Even if you get a poor appraisal, you’ll probably still come out a winner! For most traditional investment loans, you have to put down 20-25%. If after you refinance you leave money in the deal, but it’s less than the traditional down payment, you’ve won in my book. Again, if you run your numbers conservatively, you’ll have lots of room for the unexpected!

Try to run numbers on properties everyday in the area you want to purchase. I used the BRRRR calculator on BP. I agree that you should do something local if possible. Figure out what your limits are as far as price.

I would also call around to banks and mortgage companies to find one that does cash out refinance on investment properties. It'll be helpful to have this part figured out in advance. Make sure you will qualify for it. Most will make you wait 6 months to refinance based on ARV (known as seasoning).

If your finances are lined up, start making offers! If the numbers work (have ARV, know repair costs, etc) pull the trigger. It's a numbers game. In the end, you'll look back and realize it wasn't as scary as you envisioned and you'll be looking for your next deal!

Investment Info:

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

Purchase price: $140,000
Cash invested: $40,000

This is my first 4 plex, but definitely not the last. We caught a lucky break finding this deal and there's more opportunity where this came from.

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

I decided a while ago that the multifamily space is where I will focus my efforts. I look for deals with 2-4 units so I can take advantage of the cheap financing.

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

We were looking at a 4 plex on the same street on the MLS, so my wife called to see what they were getting for rent. She struck up a conversation with the owner and learned he was looking to start selling off his properties. We now have the option to buy more buildings from him. There wasn't much negotiation. We did this deal off-market so I got a fair price on it. It was in great shape.

How did you finance this deal?

I got a traditional loan for this deal. I had the extra money for the down payment because I was selling my only SFR at the time. I used that money here, and it was a much better use of those funds!

How did you add value to the deal?

There was no need. The building was turnkey with good tenants in place.

What was the outcome?

We have a great cash flowing 4 plex earlier than we expected. I now also have a path to early retirement. If I buy one building a year from this investor, I will be able to quit my day job much earlier than I initially planned.

Lessons learned? Challenges?

Put the recommendations on the podcast into action! What my wife did to find this deal was a lucky break, but it was because she tried something I had heard on the BP podcast multiple times. Call "for rent" signs. Think about it - landlords that are either tired of the game or a ready to retire are probably going to feel it most during turnover or eviction.

@Daniel Mendez I got a duplex on the MLS for less than half the asking price and then used the BRRRR strategy. They are out there. It's a numbers game. Keep looking and keep making offers!

@Wai Cheng There’s always going to be people that need a place to live regardless of the time of year. I wouldn’t let that hold you back from looking or buying.

@Christa Heydt I agree with John that no animals should mean no animals. You’ll never be able to police “visiting” animals. If they get an animal, they’ll just say it’s visiting and how will you prove otherwise?

Regarding the property you’re moving out, it’s always best to have the property cleared before moving someone in. Removing things over time is going to be a hassle for your tenant and you.

@Armando J Daniels II Welcome Armando! You’re at the right place to get help and support. O-H!

@Jesse Barahona Congrats! Keep going!