All Forum Posts by: Thomas Magill

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $84,257
Cash invested: $58,443
Sale price: $181,000

This property was unique because it was the first time I've done 'subject to' financing for a flip. The seller was about to go into foreclosure until Covid hit and then her case was continued until mid July. I stayed in touch with her throughout the process and eventually closed. I purchased the property at as a 2/1 and converted it to a 2/2. The previous owner had pets that used the home as their 1400 sq ft bathroom so I refinished all of the floors and Kils the walls.

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

At the time of purchase, a lot of my private investor money was deployed on other projects. So, this project was very appealing because they were offering it at 'subject to' because the owner owned more than the property was worth.

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

I got this deal through a direct mail campaign. This was a very unique seller. I don't know how much I can share but lets just say she was different.
I negotiated with her directly and we came up with a price to pay off her home and provide her with a little money to move. She was very pleasant to deal with while she was sober, but once she got a couple drinks in her she was pretty nasty. Once I paid off her bank I cut her a check that she never cashed, very strange.

How did you finance this deal?

The cost of the home was financed 'subject to' and I self funded the cost of construction.

How did you add value to the deal?

I added a bathroom (owners suite), took out the drop ceilings in the living room, opened up the floor plan, and new kitchen/ bathrooms/roof/HVAC/Electrical/Plumbing.

What was the outcome?

I sold to a great guy who has since done some additional work to the exterior of the property with a fence.

Lessons learned? Challenges?

The biggest lesson learned was I needed to get access to the lending institution's pay off amount. There is a form the seller signs that allows the 'subject to' buyer to access. The lender would not provide the pay off amount until January 1st 2021 for tax purposes, I'm assuming, so I had to wait two months to close on the property.

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

No

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $84,257
Cash invested: $58,443
Sale price: $181,000

This property was unique because it was the first time I've done 'subject to' financing for a flip. The seller was about to go into foreclosure until Covid hit and then her case was continued until mid July. I stayed in touch with her throughout the process and eventually closed. I purchased the property at as a 2/1 and converted it to a 2/2 as well as opened up the kitchen to the living room. The previous owner had pets that used the home as their 1400 sq ft bathroom so I refinished all of the floors and Kils the walls.

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

At the time of purchase, a lot of my private investor money was deployed on other projects. So, this project was very appealing because they were offering it at 'subject to' because the owner owned more than the property was worth.

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

I got this deal through a direct mail campaign. This was a very unique seller. I don't know how much I can share but lets just say she was different.
I negotiated with her directly and we came up with a price to pay off her home and provide her with a little money to move. She was very pleasant to deal with while she was sober, but once she got a couple drinks in her she was pretty nasty. Once I paid off her bank I cut her a check that she never cashed, very strange.

How did you finance this deal?

The cost of the home was financed 'subject to' and I self funded the cost of construction.

How did you add value to the deal?

I added a bathroom (owners suite), took out the drop ceilings in the living room, opened up the floor plan, and new kitchen/ bathrooms/roof/HVAC/Electrical/Plumbing.

What was the outcome?

I sold to a great guy who has since done some additional work to the exterior of the property with a fence.

Lessons learned? Challenges?

The biggest lesson learned was I needed to get access to the lending institution's pay off amount. There is a form the seller signs that allows the 'subject to' buyer to access. The lender would not provide the pay off amount until January 1st 2021 for tax purposes, I'm assuming, so I had to wait two months to close on the property.

Investment Info:

Single-family residence buy & hold investment in Kings Mountain.

Purchase price: $69,000
Cash invested: $55,000

This project was originally purchased to flip, but after speaking with the property owner next store, I was able to get that property under contract. So, I decided to keep this property as a BRRRR. This area is a little far from where I live so it didn't make sense at the time to keep this property, but after further thought, and getting the property next door under contract, I reconsidered.

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

The further along we go into this cycle the more expensive properties get, so I've had to adjust my investment locations. This property is located in Kings Mountain, NC. Kings Mtn is about 45 min outside of Charlotte. Kings Mtn is in the process of building a casino and I felt the property values would significantly increase due to the influx of population. I continued to study the area and realized this town could stand on its own with or without the casino, so it solidified my decision.

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

I found this deal through a wholesaler. He originally had the deal out there for 90k I believe and we made our way down to 69k. The wholesaler made 24k on the wholesale fee, and I believe the property is worth 156k. So, after investing 124 into the deal I created at lease 30k of forced appreciation.

How did you finance this deal?

I self financed the purchase of this deal, and got an unsecured construction loan from a private money lender.

How did you add value to the deal?

I did a full renovation of the interior/exterior of the property, as well as convert a mechanical closet into another bathroom. So, the property went from a 3/1 to a 3/2.

What was the outcome?

The project took 2 months to renovate and put a tenant in place. I had to wait for the property to season in order to refinance to a conventional loan. I'm currently in the process of the refinance and it should be closed by 12/3/21.

Lessons learned? Challenges?

This project went very well. I learned on this project to adjust the home to the window sizes rather than get custom windows and have to wait 3 months for the windows to arrive. The height of the windows were all standard, but the widths needed to be adjusted. So, rather than waiting 3 months my team built the sides of the windows in to fit the standard (in stock) windows.

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

I worked with one of my private lenders. He is someone who has been lending me money for a couple years now. He is a retired GM employee, who is a fantastic, patient guy. He removes a lot of stress from my life.

I am looking for examples of hardship you can claim for subdividing land that does not conform exactly to zoning ordinances. The land is close but does not have the required sq ft. Its under by .2 acres.

I purchased 8 homes on 3 parcels. I need to subdivide the land into 8 individual lots, but need to claim hardship in order to do so. Please let me know if anyone has dealt with this issue before, and what are some examples of the hardship you claimed in order to accomplish this task.

Thank you BP community

I am looking for examples of hardship you can claim for subdividing land that does not conform exactly to zoning ordinances. The land is close but does not have the required sq ft. Its under by .2 acres.

I purchased 8 homes on 3 parcels. I need to subdivide the land into 8 individual lots, but need to claim hardship in order to do so. Please let me know if anyone has dealt with this issue before, and what are some examples of the hardship you claimed in order to accomplish this task.

Thank you BP community

I am looking for examples of hardship you can claim for subdividing land that does not conform exactly to zoning ordinances. The land is close but does not have the required sq ft. Its under by .2 acres. 

I purchased 8 homes on 3 parcels. I need to subdivide the land into 8 individual lots, but need to claim hardship in order to do so. Please let me know if anyone has dealt with this issue before, and what are some examples of the hardship you claimed in order to accomplish this task. 

Thank you BP community

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $64,000
Cash invested: $55,000

This is a single family rental property I purchased from a friend of mine. It was a full gut renovation and was in the worst condition I've seen to date.

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

I wanted to get into the single family rental market and the numbers were close on this property if I left money in the deal.

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

A friend of mine sent me this deal after I lost it to them from a wholesaler. So, I ended up having to pay 5K more than I originally anticipated.

How did you finance this deal?

I financed this deal through a private money lender and will be refi'ng their money out shortly.

How did you add value to the deal?

This was a full renovation. The property was in really bad shape and needed a lot of love. New plumbing, electrical, HVAC etc.

What was the outcome?

The property's renovation is complete and it is rented by some great people.

Lessons learned? Challenges?

The lesson I learned on this property came during the initial analysis. I had tunnel vision when it came to cash flow. If a property didn't fit in the nice little cash flow box, I wouldn't do it. But, after looking at it again, I realized if I left some money in the deal during refi, I could cash flow the property. I would chalk it up to money I wasn't going to need in the near term so eventually made sense.

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

Not really, I would recommend my private money lender, but I'm not sure if he'd want that.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $600,000

This was a 10 SFR purchase. The 10 homes average in size at 850 sf and were built in the early 90s by the previous owner who lived in one of the properties. We purchased the properties at around tax value. This is a joint venture with my contractor who brought me the deal (through our HVAC contractor) and will be performing the maintenance on the properties while I handle the finances and property management.

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

The instant equity and cash flow potential was the biggest draw. All the properties are located in the same location, so there's economies of scale. It also gave me the opportunity to joint venture with a contractor/investor friend of mine who brings a lot of value to the relationship through his construction knowledge.

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

My HVAC contractor knew the owners. He has been servicing the HVACs for some time and found out they wanted to sell. There were very little negotiations. The seller had his price and he stuck to it. But, the deal made sense at his price, so it was a good deal for all parties involved.

How did you finance this deal?

I raised $530,000 in private money and I put in $70,000 of my own money. The goal is to refinance the private money out in 6-8 months.

How did you add value to the deal?

I added value by partnering with someone who provided strengths where I am weak, and hopefully vice versa. In addition, we will be building additional homes on the property.

What was the outcome?

We will hold the property for at least 5 years and build some additional homes on it to rent. The property currently cash flows well.

Lessons learned? Challenges?

We ran into a communication issue right before the closing because we were playing telephone with our attorneys. So, we called the seller directly (who was ready to walk away from the deal) and we asked if we could sit down with him and his wife to talk it out. This saved the deal. The lesson learned were you can perceive someone's actions in a certain way, but until you look them in the eyes you won't know. Its better to make the human connection, rather than going through email, text, etc.

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

Most of the lenders are private money lenders and a smaller portion was a family member. I am a broker and GC so thats all we will need for the foreseeable future.

I primary invest in Gaston (Belmont, Gastonia, Mt Holly etc) and Cabarrus county (Concord and Kannapolis)  (they border Charlotte - Mecklenburg) and own rentals in each.  Both counties are very good for rentals especially if you are staying under 400k. 

Thank you!