OfflineFIRED UP! First off, 3 keys words for your success in real estate investing, NETWORK NETWORK NETWORK! Now with that said, a realtor that I have only done one deal with, about 5 years ago, and I are hooking up for a new deal. He and I have stayed in contact on facebook throughout the years and a couple Thursdays ago he had posted something and I made a comment about not being where I want to be. The next thing I know my phone is ringing and he is asking me what we were doing and what was holding us back. We had a great conversation and he was on a mission to help us get moving.
The next day he calls and says he just got 3 listings(10 unit apartment, 2 triplexes, and a commercial building) from a bank that morning and he will hold off before telling any other investors and before he lists them and for us to check them out. POCKET LISTING and we are the ONLY ones that know at this time!
We drove up the next day and decided that we wanted to go for the 10 unit apartment(2bed/1ba). The,as is, appraisal was $250k with 5 units rented, average $500, but the 3 newer units were at $525, so we know the new rent like it stands is $525. We told him to offer $200k and he decided to make it $190k. After some back and forth with the bank, today the offer was signed for $217k. About 30 minutes after hearing that the bank signed and we are a go, our bank that we hit up for financing the deal told us we were approved for a loan on the place, 80% of purchase and 90% of the rehab. SWEET, another relationship(network network network) with a bank and they had us approved in a couple days!
The selling banks appraiser was figuring on it needing $25k in rehab asap but we want to do more then what they are thinking because right now any rehab we do will be financed for 20 years vs getting hit out of pocket if we wait for issues. 3 of the 10 hvacs have been replaced recently but the other 7 look tired so we have our hvac guy going out to check them out and we may end up replacing most or all of them. He likes the rock it till you drop it saying with hvacs, but when we are talking about 7 old ones, not sure I want to chance them going bad and us having to come out with the cash later on when they go. Also checking on how long we have in the roof, might do that also, as well as other repairs that we know are needed right now.
Now here is the awesome part of it all, being a former Marine and involved with veterans in different ways, one of our goals was to be able to help veterans with housing. This apartment is about 35 minutes from the house, BUT 5 minutes from the VA that we volunteer at monthly. I called a contact we have that works with veterans housing and he is putting us in contact with someone that works with veterans in the same town as the apartments. So our ultimate goal would be to have all 10 units rented out to veterans. 2 more of the apartments were rented out this weekend for $525 so there are 3 vacancies, all of which need rahab. So as soon as we close and get those rehabbed, we are hoping to have 3 vets ready to move in, so that would be an incredible start to this goal!
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Jack & Michelle,
This is perfect for you guys! I love it!
Relationships are the main ingredient!
Keep visualizing your future and you will live it!
Karen
"You're never too old to be what you were meant to be!"
www.deangraziosi.com/real-estate-forums/investing-journals/59128/day-for...
"Shining Like a Star & Dancing on Sunshine"
"Shoot for the moon! Even if you fall short, you'll still land among the stars!"
Great job. Great that at least there are some private sector folks that care about our veterans!!
Now if you go to Planned Parenthood you can get Government assistance and plenty of help on the spot. But if you are a veteran going to the VA, hurry up and wait!!
Thanks to all the Vets that because of their sacrifice we can celebrate the 4th of July this weekend and every other holiday for that matter!
Talk to you guys soon,
Michael
Knowledge is power, but execution trumps knowledge. Tony Robbins
http://www.mdhomeacquisitions.com Seller site
http://www.mdhomeacquisitionsbargainhouses.com Buyer site
http://www.mdhomeacquisitionshousehunter.com Bird Dog Site
http://www.mdlodeals.com Tenant/Buyer site
That's a great deal and strategy, and a great example of your recent suggestion to network toward success. Much like Dominic once suggested here, "Don't single yourself out, mingle yourself in." I'm still working on that, being somewhat of a REI loner. But, it really is great to hear of successful deals done via connections. Especially those that come out left field like that. You just never know... Congrats to you on thinking big & executing in the same manner. Continued success to you, Jack. Good luck to all our vets.
that is an awesome deal, especially because the end product of it is to help others! Very cool!!!
Val
Valerie
“And will you succeed? Yes indeed, yes indeed! Ninety-eight and three-quarters percent guaranteed!” ― Dr. Seuss
"I believe in angels, the kind that heaven sends; I am surrounded by angels, but I call them friends" - Unknown
My journal: http://www.deangraziosi.com/real-estate-forums/investing-journals/59110/...
I am interested with this share!!
Would love to be an owner, I would need additional information on how to start Thanks in Advance. And also this share giving many points for the readers. Sometime it may help for the students if they are writing papers with the help of cheap essay writing service in their education.
Hey guys, thanks for the comments Karen, Michael, Ron, and Val. We are excited and learning quite a bit on this. WOW, you know some things will be different or cost more but when the figures start hitting, its an eye opener.
Take the inspection as an example, instead of one inspector for a sfh at $300-$350, it took 3 inspectors and they gave us a break at $2k. Now understand, that $2k is gone now, if we end up for any reason not doing the deal, we lose that. With that and having multiple contractors out at the apartment, the rehab we want to do is going to be past the $50k we talked to the bank about. New roof, ummm not a sfh roof for $4k-$5k, but a roof that covers a 10 ranch apartment building that retails at $25k, but I have a great relationship with my roofer so he is saying we will be around $17k. Our hvac guy went out and most of the units are original from 1992 with very little life left, if any. He said we are looking at replacing at least 5 right off the bat, at a discounted price of $3500 each.
OK, Jack likes to make money, not spend it! But we are still thinking positive about the deal and went to talk to the bank about seeing if we can get an increase in the rehab budget, as well as we are going to the bank we are buying it from and going to ask for a reduced price due to what we are finding out. We told the bank we are getting the loan at to hold off on the appraisal until we talk to the selling bank about it, because if they are not willing to come down we really need to look everything over again. They were ready to get the appraisal done and need to because on a commercial it takes longer and cost more, to the tune of $3200, that of course also does not come back if we back out of the deal.
So note to self, commercial definitely takes longer to get everything lined up with due diligence, if your use to sfh expenses, you need to be prepared for sticker shock with multifamily prices due to the size of the project.
Anyway, we are excited either way right now because we are learning and hopefully going to be owners of our first apartment. This coming week will tell us a lot as far as the selling bank lowering the price and us narrowing the rehab numbers with the different contractors. Life is good!
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Well I need to look at this like a glass half full, that we are learning from this process even if it cost $2k for the inspection that we don't get back. After working with the bank and them approving us for more money, we ran the numbers with multiple bids from contractors and they were not working out so we went back to the bank saying we needed a reduce in price and more DD time. They came back countering our offer and said no extra DD time, so the numbers don't work and we have signed the termination letter and are out. I called my realtor and talked to him and he said he had a call into the bank to let them know they needed to do better because we were walking and he hadn't heard anything back. Back in the hunt! We need to find a quick wholesale deal to recoup this $2k!
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They may come back to you if it sits for a while
It seems like no deal is a waste. You always learn something valuable!
Hope all is well,
Michael
Knowledge is power, but execution trumps knowledge. Tony Robbins
http://www.mdhomeacquisitions.com Seller site
http://www.mdhomeacquisitionsbargainhouses.com Buyer site
http://www.mdhomeacquisitionshousehunter.com Bird Dog Site
http://www.mdlodeals.com Tenant/Buyer site
Tell the listing agent you have an inspection report available for $1,000. That will get half of it back.
Ha, that's what I did!! Hoping to recoup a grand, that would be nice!
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Such an inspiring story from successful power couple like you! Networking is not easy especially if you have few networks. its very important that start creating Essay.expert review circles whom you can educate and rely on all the time.