All Forum Posts by: Kimberly Kesterke

Investment Info:

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

Purchase price: $180,000
Cash invested: $30,000
Sale price: $350,000

This charming triplex is nestled in the heart of Summerville in Augusta, GA. I purchased this deal off-market and renovated 2 out of 3 units. After holding it for 2.5 years, I sold and did a 1031 exchange into a different property.

Purchase price $130K
Renovations $50K
Add'l cash $30K

Total profit minus closing costs and realtor fees = $150,500.00

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

I had been interested in doing a flip after attending a few real estate classes. I was also looking to expand my level of experience and give flipping a house a shot.

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

One of the local agents called me and gave me first look at a property prior to listing. I liked the location and was able to see various exit strategies. I decided to go for it.

How did you finance this deal?

I used a hard money lender on this deal. They were able to act quickly and help me secure a cash offer- making my terms more attractive to the buyer.

How did you add value to the deal?

I renovated 2 out of 3 of the units, and then boosted rents from 650/ month (one unit) to $3049/ month. I reached the higher rents by increasing the bottom unit from $650 to $849 and turning the top unit into a furnished rental- catering to traveling nurses. ($1495) The other bottom unit was secured by a long term tenant at $750/ month

What was the outcome?

I ended up holding the property for 2.5 years. I refinanced out of my hard money loan after 9 months of seasoning and moved the debt into a locked 30 year loan. I then had time to boost the rents and show financials for 2 years. This helped create an attractive business case to the purchasing investor. I sold the investment in 2021.

Lessons learned? Challenges?

So. Many. Lessons.
#1- Hire good rated contractors. I ended up wasting a ton of money hiring inexperienced contractors.
#2- Be careful who you partner with- I brought a partner in the deal who wanted to be more of a back-seat investors. I secured the financing, found the property, brought 1/2 the money AND was managing all of the work.. I noticed the disconnect very quickly and paid out the partner their 1/2 of the money + interest- then took over full ownership.
#3- Never quit

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

Yes- I worked with Ross Trulock on the real estate agent side. He is in Augusta, GA and is an investor friendly realtor.
I worked with Locklin Capital in Atlanta, GA. They were awesome- I have since recommended other investors to work with them and they have been happy.

Investment Info:

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

Purchase price: $180,000
Cash invested: $30,000
Sale price: $350,000

This charming triplex is nestled in the heart of Summerville in Augusta, GA. I purchased this deal off-market and renovated 2 out of 3 units. In addition, I was able to boost rents to $3040/month between the 3 units altogether. After holding it for 2.5 years, I sold and did a 1031 exchange into a different property.

Purchase price $130K
Renovations $50K
Add'l cash $30K

Total profit minus closing costs and realtor fees = $150,500.00

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

I had been interested in doing a flip after attending a few real estate classes. I was also looking to expand my level of experience and give flipping a house a shot.

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

One of the local agents called me and gave me first look at a property prior to listing. I liked the location and was able to see various exit strategies. I decided to go for it.

How did you finance this deal?

I used a hard money lender on this deal. They were able to act quickly and help me secure a cash offer- making my terms more attractive to the buyer.

How did you add value to the deal?

I renovated 2 out of 3 of the units, and then boosted rents from 650/ month (one unit) to $3049/ month. I reached the higher rents by increasing the bottom unit from $650 to $849 and turning the top unit into a furnished rental- catering to traveling nurses. ($1495) The other bottom unit was secured by a long term tenant at $750/ month

What was the outcome?

I ended up holding the property for 2.5 years. I refinanced out of my hard money loan after 9 months of seasoning and moved the debt into a locked 30 year loan. I then had time to boost the rents and show financials for 2 years. This helped create an attractive business case to the purchasing investor. I sold the investment in 2021.

Lessons learned? Challenges?

So. Many. Lessons.
#1- Hire good rated contractors. I ended up wasting a ton of money hiring inexperienced contractors.
#2- Be careful who you partner with- I brought a partner in the deal who wanted to be more of a back-seat investors. I secured the financing, found the property, brought 1/2 the money AND was managing all of the work.. I noticed the disconnect very quickly and paid out the partner their 1/2 of the money + interest- then took over full ownership.
#3- Never quit

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

Yes- I worked with Ross Trulock on the real estate agent side. He is in Augusta, GA and is an investor friendly realtor.
I worked with Locklin Capital in Atlanta, GA. They were awesome- I have since recommended other investors to work with them and they have been happy.

@David Babayev yes I got permission from the seller and used their MLS photos. The key is permission first.

Great question!

@Craig Dieterich seems like a good deal to me. You can still write off depreciation and small repairs. I’m sure I’m not the only one who has said this but if you don’t want it- I will buy it! Lol.

@Lee Ripma How long have you been "retired" from the W2 and doing RE full time? 

I love to network with other people who have W2s and invest in real estate- My questions- How do you manage both? What strategies do you use? 

@Kaylee Pratt is an investor themselves.

I'm working on pulling together a community of Landlords who hold down full time jobs. Whether you are making great profits and choose to keep your 9-5 or working towards an early retirement, I think we as W2 Investors have a unique experience and story.

So- post, comment or share. What are some of your wins? What are some of your questions? And better yet- any war stories? (We all have those.. ) Since I started this thread, I will go first:

I started investing 15 years ago and have built a cash flowing portfolio that finally could support my early retirement efforts. However, ironically, now that I'm at the point I can choose- I'm choosing to continue working because I'm apart of a great company, have challenging work, and feel I am making a positive impact.

I love the concept of early retirement, and I am an avid follower of FIRE (Financially Independent Retire Early). But I think I'm not alone in also liking the "somewhat" security of a 9-5, the ability to access conventional funding and other perks of the w2. Plus, if an AC goes out, or I have a heavy maintenance month, I know I have a bit of a buffer with income coming in elsewhere.

Now, there is a long list of tradeoffs- but would be interested to hearing from all of you as well. Why do you continue working a 9-5? If you reached your FI number, would you quit your job, keep working or do something else entirely?

Looking forward to reading the comments and joining the conversation!

@Sofia Ruano-

@Kimberly Kesterke Thank you! What were the costs to file those documents? (Lawyers have different fees, but I believe it was between $500 and $700

When you were added to the deed, the mortgage was not called due? No the mortgage was not called due. We continued payments on-time, so there was no need for the lender to call it- Wells Fargo was the bank.

Did you bring the mortgage current, and then start making the payments for the original owner? Yes- in pre-foreclosures you have to bring the mortgage current- that was around $8000. Plus $1000 to the owner as incentive to allow us to keep her name on the deed but to take over payments. 

Did you wholesale it or fix&flip it? I fixed, placed a tenant and sold the property. 

@Sofia Ruano-  I recently did a wrap mortgage on a pre-foreclosure deal. You will need to get a lawyer to structure the deal for you- but in my case they structured it so that the mortgage stayed in the original owner's name and my name was added to the deed. When we flipped the property- the seller of the original loan had to sign and notorize a document that took her name off the deed, which was then transferred clean to the buyer. 

The biggest point here is that a good real estate lawyer will correctly wrap the deal. If you are concerned about the bank calling the loan- we didn't have any issues because the mortgage was still getting paid each month. 

PM me if you would like more information, 

Kim