Latest Deal
Hello all, wanted to share my latest deal and how I got it to help inspire and or educate on how sticking with a property sometimes pays off. My main forte is cashflow properties, recently bought John Locke's sub2 program and working on adding it to my arsenal but this deal is a traditional cashflow property.
They are 3 duplexes in a real rough area of southwest Florida. Small, all 1/1's, and need by my estimate, about 5-7k worth of rehab. Because of the shape and area they were listed on the MLS at 49,900 each, which, you could certainly make the numbers work at that. They were first listed in June. I have access to the MLS and I watched them go into pending (under contract), then came back out a month later (meaning the buyer backed out or couldn't close). I watched the same thing happen in August. I then saw in October that a new agent had them and listed them for the same price. Saw them go pending, then, again, come back out just two weeks ago. I spoke to the listing agent and the owner(s) were desperate. I submitted my offer of 100k for all 3 with 6% coming back ($6,000) toward closing costs, etc. Now, I also submitted my pre-approval from my lender. As some of you know, because these are all deeded separately you have to get separate loans per property and it is not always easy to get an under 50k loan from a lender, I know I can with mine but pretty sure this is what hurt those other guys that could not close.
So, the numbers...
I estimate, which I am always pessimistic, that my costs per month will be 1100 a month (that's vacancy, repairs, PITI, advertising, legal, etc) Once cleaned up these units will rent for $400 easy and if really cleaned up $425-$450 per month. So, pessimistically, $2400 a month at costs of 1100 a month for a cashflow of $1300 a month or roughly $216 per unit per month. Not too shabby. Now at $2400 a month, what do you think the value will be at? My guess is at least 200k, again, pessimistic.
Moral of the story is don't forget about the MLS as a source of deals and don't give up on a property if it goes under contract, never know what others will be unable to do =)
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Pm me and I can send you the name of someone. he can do both, he is a lender and can do hard money or conventional but he's good.
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Ray,
Atta Boy! I love seeing deals and success stories posted with details. Congratulations and much continued success!
That's a sweet cash flow. Just curious, with that cash flow and the rough part of town you mentioned, do you plan on using them for section 8 and hire a property manager or do it yourself?
Larry
Hey Larry, I manage my own right now, this deal puts me at 31 units. I will probably section8 them, I don't section8 everything but in this neighborhood it might make sense and I know there is a need for these right now.
Thanks!
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Wow Good for you. You keep buying them in bunches like this pretty soon managing will become a full time job for you. One thing for sure, if you keep picking up deals like this one with that kind of spread, it won't hurt so bad if you decided to turn them over. Much continued success and Happy New Year.
Larry
Thanks and the same to you!
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Hi Ray, good for you. I started not to long ago (I have one property and working a deal to sell it, and my primary residence). I work with a bank, I have done these two purchases with them, but they are sometimes to burocrats and with two loans it has become much difficult to borrow from them. Any sugestions for lenders that work fast and not to burocratic?
regards,
jlsayan
PS: By the way, I am located in the Miami area
Ray, how do you find the time to manage the 31 units? Are they single family homes or apts?
And I still have a fulltime job in the IT industry
Well, I have a partner (who also has a fulltime job) that we are pretty much equal on the work. I spent more time doing deals and he spends more time managing handymen, contractors and accounting but we still do all aspects. Shemins book really helped in running an efficient ship.
The neat thing is both my partner and I read our first book on real estate in April of this year. All of these units have been picked up since June. We do use a voicemail system and we use handymen for almost everything. I still do the bug spraying as the companies just seem like such a rip off for what they do versus how much they charge.
The most time spent is getting old tenants evicted. Any tenants we have placed we have done all the appropriate checks and demanded a sec deposit so we have not had to evict any of the tenants we have placed.
GL
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I forgot to answer your other questions. We have triplexes, duplexes and single families.
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Ray,
You've acquired those properties this year? Now that's an inspiration for a New Year's Resolution if I've ever heard one. Continued success. Have you been a member of the Investment Group this long as well? I'm in your neck of the woods and am looking to get more involved in the business this year. I purchased one rental unit this year and one property at auction which I've held on to. If you're open to sharing ideas, etc., let me know. There's plenty to go around from what I've seen in my limited exposure.
Lost my response to this as I posted some personal info, aplogies to the staff at TCI.
Yes, all acquired this year, as everyone says, it's all a numbers game, if you look at the paper everyday, if you make calls everyday, if you network everyday, you will find deals.
GL everyone!
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