All Forum Posts by: Thomas Tsitouridis

@Jaron Walling thanks!! We are focused on a long term buy and hold strategy to build wealth. We would need about 75k for the next deal to get a similar project and that would mean using the refi amount of 47k along with additional funds, that we have, for the next one. 

@Theresa Harris we are leaning towards the refi due to still generating the $700 of cash flow! The way you mention to look at it is mind blowing. Absolutely the best move we feel is to move forward. If we are able to use that money, along with some additional funds, we are technically adding about 1k of month in cash flow from the next one to our portfolio  

@Whitney Hutten the bank only offered this ARM or a fixed rate which would mean a $1,500 mortgage. No Pre payment penalties on current or potential loans

Appreciate the brainstorm everyone!! We will be moving forward with this

So, we are at the point where we have completed renovation on our 2nd property, new PAYING tenants are in, and are now able to cash out refinance this deal. Breakdown below on our property and current mortgage rates.

Purchase: $190,000

Loan: 6/1 ARM 15yr balloon 30yr amortization @3%

ARV: assuming $250,000

Rents: $2,900 per month

Expenses: $1,800 per month (includes taxes, electric, insurance, flood insurance, current mortgage, vacancy rate, property management)

NOI: $1,100

Invested: $79,000 (down payment, closing, rehab)

Our lender is willing to give us up to 75% ARV ($187,500). We owe $141,000. After pay off we are left with approximately $47,000.

The new loan terms are as follow:

Commercial Loan: 5/1 ARM 15yr balloon 25yr amortization @4.25%

Our current principal and interest is $600 and this new loan would bring it up to $1,000 per month. Meaning our cash flow goes from $1,100 down to $700. The upside here is that we receive our down payment back of $47,000 while still leaving some money in the deal. We would use this money for the next BRRRR. We also have the option on a fixed mortgage but that would bring up the loan to $1,500 month leaving too little for cash flow IMO.

Any thoughts and/ or help would be greatly appreciated if we should move forward with the current new loan or go in another direction. 

Thanks everyone!

Investment Info:

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

Purchase price: $220,000
Cash invested: $88,000

2 BD/ 1B with Garage & W/D
3 BD/ 1B with Garage & W/D

Investment Info:

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

Purchase price: $190,000
Cash invested: $64,000

2-family rental property

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

9.03% cap rate | 26.56% cash on cash ROI | 49.29% Cash Flow

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

Through our local broker. We actually purchased this property 5k over asking.

How did you finance this deal?

Balloon 6/1 ARM 15/30 @3.000% with 25% down payment

How did you add value to the deal?

We own a construction company that is completing the renovations to give us the returns we mentioned. This is approx. 30% higher than what the previous Owner was receiving.

What was the outcome?

We will easily rent these units at the asking and are looking to refinance when the value is increased to get our returns back. BRRRR

Lessons learned? Challenges?

It's been challenging purchasing and maintaining a property 1.5 hours away from where we live. We are sourcing local attorney's, lenders, and building a local team to help with the buying/ renting process.

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

Berkshire Hathaway. Very knowledgable in the area.