All Forum Posts by: Tim DeFor

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $42,000
Cash invested: $1,500

The cashflow has continued to increase as rents have increased. I've continued to make minor improvements along the way. The property is now worth about $65K. I am about to refinance $20K out to use for another deal. It will still cashflow about $100 after refinance, Cap-Ex, Management, and Maintenance.
I've had this for 16 years.

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

I was looking for some side income and investing for retirement.

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

It was on the MLS. I negotiated through my real estate agent.

How did you finance this deal?

I offered a higher price with cash back from seller and purchased early in the month to decrease my cash out of pocket up front. I purchased as a long term rental.

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

It was a long time ago. I don't remember who the agent was.

@Brent Coombs The financing time pay off the seller and down payment investor would’ve a cash out refi after 5 years. If the value holds flat I’ll have $60k in equity on a $200k property. Thanks again.

@Brent Coombs great questions. I think the older guy is interested in seeing me get started. 2 recently rehabbed (flooring and paint) units are vacant. Rents were under market. He’s had them for 20+ years. He’s only getting $400 a month at this time from the basement unit. I’ll keep looking for other deals. I’m taking the weekend to consider an alternative offer that has better numbers.

Thank you for the guidance.

Thank you Steve, I think I'm a little too eager. 
The loan from a friend for the down payment would be interest only. I would only hold that loan until I refinanced the property to pay off the seller. I like your recommendation of asking the seller to carry a shorter term interest only loan. As an investor, he should understand the need for cashflow and may be willing to postpone receiving some of his cash for a larger overall gain. He is older and is selling to get out of the game, so I don't know how long he would want to carry it. It doesn't hurt to ask. Thanks again.

@Brent Coombs thank you. Low interest seller financing. With little out of pocket in the beginning, maybe up to $5k, even if I don’t cash flow (currently -$25/ month) for years, the pay down and appreciation still continue. Multi-families don’t come available here often. The realtor had difficulty finding comps. Thank you for the warnings. I’ll certainly run the numbers more closely.

I’ve got cold feet on putting in my first offer on a small multi family.

Triplex $185,000

Rents $1,650 (combined)

$3,000 rehab needed

I have a friend who will loan the down payment at 6% interest only until I can refinance. With current market rents and conservative (high) expense estimates, it will come short of cash flowing. I can’t get a conventional loan because of other projects I’m in the middle of. The seller is open to some creative financing.

My personal hesitation is that it may not be the right time. We are also purchasing 40 acres to rezone and subdivide into acreages, fixing up our current house to sell, and doing an addition and complete gut remodel of a house we are moving into. I’m also working full time. My head is swirling!

My question is, if we decide to go for it, how do you present a creative financing offer with an agent between? Slow conversation on a possibly fast moving house?

@Michael Cabaña This May seem obvious, but there isn’t much you can due to affect the objective side of appraisals. However everybody also has a subjective side including appraisers. So that’s where I would put my attention. Decluttering, cleaning, freshening up smells, and quick touch ups and repairs show pride in and care for property. If you live on a busy street make sure you have driveway parking available for them. Even the smell of brewing coffee or baking cookies have an emotional impact.

@Michael Cabaña