All Forum Posts by: Zane Cress

Investment Info:

Condo buy & hold investment.

Purchase price: $93,000
Cash invested: $30,000

My second purchase from my first 1031 exchange. I really like the complex and location. Easy to pick up a second unit knowing the first one was cash flowing and I had strong demand for my rental strategy. Came with a tenant paying under market, bought out the last few months of the lease so I could get to work and start cash flowing properly. Full paint, new floors in kitchen and bathroom. Fully furnished, mostly off Facebook marketplace.

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

Cash flow potential.

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

Found on Zillow, negotiated down $5k for an AC unit fix.

How did you finance this deal?

Conventional loan, 20% down. Funds from my 1031.

How did you add value to the deal?

Cosmetic rehab and furnishing.

What was the outcome?

Cash flowed every month once it was refurbished. Investment recouped in 6 months.

Lessons learned? Challenges?

Older places might have water damage in the bathrooms that one catches until a floor comes up.

Investment Info:

Condo fix & flip investment.

Purchase price: $63,000
Cash invested: $20,000
Sale price: $105,000

Bought this as part of a 1031 exchange, the first of two properties. Great second floor condo with vaulted wood ceilings. I was heavy into AirBnb at this time so I fixed it up and furnished it. Got a great deal on furniture from a local hotel that was swapping out all of their beds and desks. STR and Long term rental income. With the price increases during Covid I decided to cash out of this property and do another 1031 exchange into something I had been wanting closer to the downtown area.

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

Price was so cheap for the potential cash flow. Just needed a little love and some active management.

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

Found this on Zillow and directed my agent to inquire about it.

How did you finance this deal?

Conventional loan with 20% down.

How did you add value to the deal?

Paint, flooring, furnishing, appliance update.

What was the outcome?

Great cash flow as a short term rental and a fully furnished long term rental. Resold for a nice profit because my cash flow was excellent.

Lessons learned? Challenges?

You never know that the people below you are drug dealers until it's a bit too late and someone calls the cops.

Investment Info:

Condo fix & flip investment.

Purchase price: $63,000
Cash invested: $20,000
Sale price: $105,000

Bought this as part of a 1031 exchange, the first of two properties. Great second floor condo with vaulted wood ceilings. I was heavy into AirBnb at this time so I fixed it up and furnished it. Got a great deal on furniture from a local hotel that was swapping out all of their beds and desks. Rented it through football season to recoup my initial investment and then got a long term renter paying a premium for 12 months. With the price increases during Covid I decided to cash out of this property and do another 1031 exchange into something I had been wanting closer to the downtown area.

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

Price was so cheap for the potential cash flow. Just needed a little love and some active management.

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

Found this on Zillow and directed my agent to inquire about it.

How did you finance this deal?

Conventional loan with 20% down.

How did you add value to the deal?

Paint, flooring, furnishing, appliance update.

What was the outcome?

Great cash flow as a short term rental and a fully furnished long term rental. Resold for a nice profit because my cash flow was excellent.

Lessons learned? Challenges?

You never know that the people below you are drug dealers until it's a bit too late and someone calls the cops.

Investment Info:

Townhouse fix & flip investment.

Purchase price: $77,000
Cash invested: $5,000
Sale price: $99,000

My second purchase, first real investment only property. I inherited a tenant and was cash flowing $200/month. I got on the HOA board and started to help with decision making. During the year and half I owned this I decided I didn't like the area as much as I thought and the market had risen significantly. I sold to a cash buyer moving from California and did my first 1031 exchange with the profit from this property into two new properties.

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

The price point and cash flow was ideal and low risk for a first investment.

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

Used a local agent who I would do the next 4 deals with.

How did you finance this deal?

Conventional loan, 15% down.

How did you add value to the deal?

I did some minor work on the floors and plumbing but the market rose in the area and added most of the value.

What was the outcome?

Sold for nice profit and 1031'd into 2 new properties.

Lessons learned? Challenges?

Poor land development can lead to expensive drainage problems.

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

I used my go to lender to finance the deal. Got a great rate and a return customer discount.

Investment Info:

Condo buy & hold investment.

Purchase price: $66,000
Cash invested: $5,000

My first purchase was this condo. 2 bed 2.5 bath 15 minutes from the UGA campus. Mortgage was $348. I started doing AirBnb for college football weekends and was able to pay my whole mortgage for the year with 10 nights rented and avoided paying taxes by keeping my rental under 14 nights/year. I will hold this property for decades.

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

I was moving back to Athens from Tampa, FL and didn't want to rent anymore. I was ready to buy my own place.

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

I used a local agent and she found this spot after looking at 10 other properties that didn't work for me. I did try to negotiate down a few thousand dollars but the sellers wouldn't budge, which was fine because the place was still incredibly cheap.

How did you finance this deal?

Conventional loan, 30 years, 10% down with a local lender under the Prime lending umbrella.

How did you add value to the deal?

New floors, paint, popcorn ceiling scrape, new countertops.

What was the outcome?

Still have the property and it cash flows heavily.

Lessons learned? Challenges?

Learned so much about owning property and small rehab projects in this place. It gave me the RE bug.

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

I still use the same loan officer that I used for this first property and I recommend everyone to her. Most recently she funded my new primary residence.

Usually in a small town like that the numbers on the paper are not the real numbers. Especially if it is still heavily coin operated. I knew someone who bought one of these down in south Georgia and at the closing table the seller told him to go open a local bank account and gave him the real numbers. Car washes are not what they appear sometimes.

Ask for 4% if it makes the numbers work in the properties current condition. He should understand if he's been around this long that you can't walk into a bad deal. Or extend to 25 or 30 years and have the payments go to his children, or church, or charity, whatever he wants if he passes away before it's paid off.

If you can pay for it with a month of cash flow that would benefit you more compared to the future years of increased payments due to a new claim. If the tenants come back wanting to be "made whole" for a loss of sales then you might have to rethink the whole situation.

I see an opportunity to scale and turn the properties over to a property manager. If you are cash flowing and have equity why not add two or three more doors and pay someone else 5% to manage it all for you? Reduce your headache but continue to grow. 

I think you have a very good opportunity here to cash out of this house soon and 1031 that cash into a 4plex somewhere near where you live now that will definitely cash flow for you.