All Forum Posts by: Jorge P.

@Dustin Verley Thank you Dustin! I will def. be posting pictures of the renovation soon and give updates on milestones as I reach them.  

@Dennis L Lewis Jr  Thank you for the suggestion! Exit 4 is a very appealing option, def one of my top choices. The process to build the other 2 homes would be a new venture in itself but I'm totally open to making it happen. very exciting!

@Sean Carroll Thank you so much Sean, I really appreciate it. It was a very frustrating process but  Im glad I was able to see the short-sale through. Just have to execute now :-)

Hello BP! 

So I have been meaning to post for quite some time but have been very busy getting the renovations going. I Finally have some time SO HERE it go's (Please be empathetic as it is my first post on BP)

Closed on The property on MAY 18TH, 2017.

The Deal: 

This was a distressed 2 Family house sitting on an oversized lot. The Short-sale process was VERY lengthy , It took 2 years to have it approved. YES! 2 Loooong years but I did not give up!  btw- Theres nothing "SHORT" about a short-sale! 

I was able to purchase the property with a HML who gave me 85% of the purchase price @ 10% with 2 points due at closing & 100% of the rehab funds. DM me to discuss HML terms if interested, ill be happy to share.

The Numbers: 

 Purchase price: $275,000 - I was paid a 6% RE commission as I hold a license :) 

 Renovation Loan: $120,000

Funds I Brough to closing: came out to about $85,000. 

 - 25% of Purchase price 

- HML Closing cost (Along with appraisals, attorney fees, etc)

- Purchase Closing Cost 

Exist Strategies: 

 Because I was able to secure the property at the price I did, multiple exist strategies were created. Before I even closed, I had another investor offer me $425,000 so he can renovate and flip. I declined the offer because of my "WHY" - the reason I got into real estate investing (become a developer/Buy & hold investor). I want the experience which I know will make me MILLIONS of dollars moving forward.  Okay so here are the strategies: 

Exit 1: Sell it to another investor  for $425k & have him do the work. Make $100k+ in less then 30 days after closing. Not bad 

Exit 2: Keep the house Renovate the home myself & sell for $680k-$700k+. Make around $320k+- (-) Closing cost...

Exit 3: Keep the house , Renovate it & executed the BRRR strategy (Cash-out Refinance 70-80%) & rent it out for $500-$900 in cashflow.

ooh.... Remember I said the property was seating on an oversized lot!? Well, I had a zoning analysis done & I am able to subdivided the lots &  build 2 more homes on the it! Yes! 2 more multifamily homes. I would have a total of 3 multifamily homes. 

Exit 4: Build the additional 2 homes (1,200sf) at about $200-$250psf  & keep or sell at about $680-$700k. If exercise this strategy  then this would bring my profits to a little under $1M. Not bad for a 1st flip huh?

Sooo, I'm currently renovating the existing homes on the lot and getting ready to sub-divide the lot.  Would love to hear which strategy would you go with & why?

I will post pictures of progress as things start to take shape :-)

Jorge P. 

Great post! I appreciate you all for taking the time to give constructive feedback on the subject. Im currently looking for a HML in NY to fund a deal. If you guys have any that you would strongly recommend In addition to any mentioned above, I would be very thankful!!

Life is amazing! 

Jorge

Hi Cynthia, 

I own rental properties in the Bronx & I took in a LINC program tenant once who Im currently evicting. This is what I have learn through the eviction process. 

1. Send a letter to LINC letting them know that you are not going to be renewing the lease for the tenant. Have the letter notarized & certified mail (You'll need this to show the judge)

2. Also send the Tenant a letter, letting the know you will not be renewing the lease & also the  30 day notice letter. 

WARNING: The LEASE RIDER you signed when they moved in is not a landlord friendly rider. Hopefully you had your attorney look it over and amended. There is a clause in the rider that states:

"If you fail to give tenant a new lease, one will automatically be renewed under the same terms of the original lease for 2 years."

Its really scary language. I learned the hard way, while standing in front of  a judge in housing court. I was lucky to have a letter LINC sent me when the tenant had fallen out of qualifying status for a month. Letting me know they were no longer going to pay for the tenants rent & were terminating the contract with me. If I didn't have this letter, the judge was going to force me to renew the lease for 2 more years. 

Hope my story & tips help. Best of luck!

Absolutely! @Adam Cherko

Welcome to BP! I think you have the right idea. The FHA route was the one I took to buy my first 3 family home in the Bronx. It now cashflows at a 110% cash/cash ROI 🙌🏼. I currently have a total of 4 units and aiming to acquire a 20-50 unit building by end of year. One piece of advice I would give myself if I could go back in time is: make sure the property you buy is in great (not good) condition (boilers, Meters, floors, etc). This will minimize (not eliminate)the Sunday maintenance call from tenants. I have learned a whole lot being a lanlord and I have to say that I LOVE IT. I learned how to evict section 8 tenants, how to get money judgments for non paying tenants - because my attorney forgot to include it in the initial filing (I fired him and did it myself). But I think of it like this " you can't go around fire expecting not to sweat" right? Real estate is amazing and I'm looking forward to compounding the freedom it's starting to provide for me and my family. If you have any questions, feel free to shoot me an message. I'm currently in the process of looking for strategic partners to joint venture with. Cheers! All the best!!

What about : - utility charges (common areas) - water charges ? - mortgage payment ? If your not buying all cash I would add these expenses to the list for a more conservative analysis. Let me know what you come up with 🙂

You are right on point!@William read. My 1st investment property was financed under an FHA loan (3.5%) down. The loan is for "primary residences" keyword Primary- not just for 1st time home buyers. After 2 years I refinanced out of the property and it is fully rented with a 110% Annual ROI. I then used FHA again for my 2nd property. The problem I have is the 2 years You have to wait (too long for me if your trying to grow your port). Now I'm trying to buy all of my investments cash by means of Jvs and partnerships. Good luck! hope this information help your decision making 🙏🏼 Jorge