A Duplex Conversion BEFORE/AFTER Walk-Through & Deal Analysis
Вставка
- Опубліковано 20 лис 2019
- Take look at this awesome duplex conversion!
Mat Piche, AKA The Fruitful Investor, converted a single family home into a duplex rental property and takes us on property tour with before & after clips!
Mat also shares the financial breakdown & deal analysis. This is an awesome real estate investing strategy and job well done by Mat & his team.
Make sure to give this video a thumbs up and leave a comment!
Thanks for watching ;)
www.biggerpockets.com
Follow us @biggerpockets
Follow Mat Piche @MatPiche
Hydro meter = Electric meter for any other non-Canadians that are confused. I had to look that up.
lavezza - haha, always getting ripped on this in the comments🤣 I gotta remember to call it an “electric meter” for my BiggerPockets viewers😜
I was so confused. lol
I was wondering what the hell he was talking aboot! :)
I was thinking "hydro" = water, then he said they paid water and gas.
Lol. I was like, WTF?
I would love to see a renovation breakdown. Did you replace the roof, windows, HVAC and hot water heaters?
These videos are perfect thanks man!!
Great Video. Very Informative about the BRRR Strat!
Would like to have seen the details of how the lender structured the refi and how those terms specifically affected the net ultimate cash investment...very useful so I can have an idea what to expect when gaming out my own property analysis to know if it's a good deal to buy. Great content though!
Great Video!! thank you for sharing.Did you counts the Vacancy, Maintenance, and property manager? If you didn't maybe the cash flow will be a lot lower.
Please descirbe what you did with the HVAC system? Are there seperate systems for each unit?
Great job, Mat! Just wondering ... when you say you manage the entire project/work, what exactly does that mean? You some/most of work yourself? or you are a GC? Just curious. Thanks.
What paint did you use on the walls in the bedrooms ? Really compliments the floors
Good video. Very helpful.
justSTUMBLEDupon - no problem!🙌
Man nice deal. Turned out great.
The Wong Mindset - thanks!🙏
Great rehab, great formual for sucess !
Sheila G - thanks!🙏
Hello I’m am very curious with your process of converting your single fam into a 2 fam. Did you file it with the town?
I’m currently under contract for a legal single family that was used as a 2 family. There are already 2 gas lines but one 1 electrical box and 1 water tank and furnace. I want to make it make it a 2 family but I am unsure of the route I need to go through to do it. Hope you can help. Thanks
You did amazing
First video of yours I have seen. New subscriber. Paying off student loans and a vehicle as fast as I can to get to start investing in real estate! 27 years old and looking to maybe retire by 40-45. Expenses in Arkansas are low so doable. Thanks!
Carlos Weaver - awesome man! Keep kicking butt!
Y'all did very good
What's the paint color did you use at the 30 second frame? Also what store did you buy your 6 inch baseboard ?
13:10 One of the worst things for a basement tenant is for them to feel they're in a crappy dungeon basement.
It's important to consider a would-be tenant's perspective.
Great video! I am turning my family 3bd 1bth single home into a (hopefully) 3bd 1 bath three story in Boston. I am excited to take on the project. Would you know how much capital I would need ballpark? I am in the early stages of the process. Thanks Again.
How did you separate the mailbox addresses, trash cans, parking spaces, and front/back yards?
Great work Mat! Awesome to see other investor making moves in real Estate too! I might be picking up my eight property, if so I’ll add the video to my channel. 👍🏻
RAM Real Estate Investing - awesome!!🤙
Hello mate. Wondering do you create an LLC with your investors? Or do you have separate contracts in writing? Thanks love the info
Probably too late but how does the parking situation workout?
What if the house does not have a basement ? Could this still be done with a 2 story house ?
where did those white kitchen cabinets come from?
I wish you showed the stairs and entry into the basement. It looks like you sealed it off and didn't open another.
Oh I thought the basement window is access point? 😂😂😂✌️✌️✌️
iamziano - hahaha, nah. It has a separate entrance🤣
It already had a separate entrance which was originally a side door. We never get into adding another door or entrance. We forgot to show it😉
It’s in the first video at 2:30
ua-cam.com/video/NOeBAKm-AYE/v-deo.html
any issues with zoning?
I'd love to know what flooring/wall color is that. I'm looking for a similar esthetic in my properties
No wonder I can't find a interesting house these days. Most are converted! Dammit! Might as well construct my own house.
@BiggerPockets What happened to this type of content? Super solid!
sell it take the money and run
Doesn't the space near the basement windows fill up with rain?
From the window down it's usually filled with gravel, then the french drain around the basement takes the water away. The big window and "well" in the basement is big enough to serve as a second point of egress, which is needed in the basement to use it as a living space.
Nice job.
Land transfer tax? Oh my gosh. That's horrible.
Since repairs or replacement eventually come into play, do you have a sinking fund for things like HVAC, roof, plumbing issues, repairs, etc.
RealEstateInsider247 - yes, ALL of the monthly cash flow is banked in our properties bank account to build a reserve fund. We don’t pull from it until we sell the property in 3-5 years. However, the main reason why I fully flip every rental property I buy on day one is to avoid upcoming repairs. It does happen, but highly unlikely since everything is brand new👍
@@TheFruitfulInvestor I see. Thanks
No more than on a single home.
How can I learn more of these tips and tricks?
I don’t understand the basement window. What if there was a flood and the water pretty much gets dumped down towards the window
The purchase price was 395k but you only had to put up a total of 174k including renovations and everything? When the home gets sold, who are you paying the remainder of the payment too?
BUY A DO IT YOURSELF FIXER-UPPER!
Basement unit looks better than the bigger one. Having a family with that hallway of a kitchen would suck
Code must be different where you are. In my area the maximum sill height is 44" off the floor. That basement bedroom window looks at least 50" if not more to be considered an egress window. It also looks too small as minimum egress size here is 20"x24"
I agree, I didn't think the window in the bedroom was adequate for an egress point.
Erik Thede - in my area you need TWO egress points in a basement apartment. The front door being one, the 4 foot by 4 foot window in the living room is the other. Always follow the rules in your area👍
0:59 what's up with that big ass gap under the baseboard.
someone didn't scribe the boards
Where are you located ?
Hey how's this deal looking for you now?
How can you use an investor to pay? I can’t find someone that will pay it all? I’m trying with my first Brrrr
Nevermind. Should've read the comments about hydrometer lol
Clifton Jackson 🤣🤣
So you're "out-of-pocket" is 71K down and 90K for renovations with equity of 110K? so you're under water for 51K? I wouldn't have even mentioned that. Furthermore, I would probably not have robbed the 3BR upper of the needed kitchen space and would have separated the basement giving some space for the upper while compressing lower unit into a 1BR with a smaller kitchen. Seems you may have more backing than you're worth.
ha ha, I'm a NOBODY! I was just FUNNING around with you. That remodel looks GREAT!!!!
I wish he provided a breakdown of all the materials he used
He has a course which I bought. Totally worth the price, growing any business is all about systems and team in place.
Seems like a very low cash flow.
Kirky - this game isn’t about cash flow. It’s about boring and steady wealth as the property gets paid down and appreciates over time. Although, being into a BRAND new renovated deal for about 60K after the refi and still have it cash flow $400 is a grand slam to me 😜
agreed
Agreed if you don’t Refinance you’ll bet higher cash flow however refinance at the higher value will get most or all of your initial investment back and while still generating cashflow. Hence you’ll acquire a 2 unit rental property that cash flows with none of your own money invested.
@@TheFruitfulInvestor First of all - good stuff, keep it up! Am I correct to assume that you have a cash flow of $406, on a ~$64k investment after refinancing? And what kind of waterfall are you using with your investment partner?
The Fruitful Investor oh interesting, I'm still learning. We want to buy properties but have them have high cash flow so we can live off of the passive income. Right now we are living in a duplex and renting out the other side, when we rent it we will have over 2k in cash flow.
Not bad your looking for a better pay rate for your buck bad idea for a duplex but you did well
So $400/month on a $60k investment comes out to a 8% ROI. Doesn’t seem like a grand slam. More like a base hit. Just my 2 cents tho.
Algo+codehawk the $60k is the equity. I mean yeah it will go up over time but a “homerun” would be to get all or most of your investment $$ back and still cash flow while also have about 30% equity left
Yeah, this is a terrible deal. This guy is just making fancy videos. His videographer is walking around with an $80,000 RED camera. Deal is terrible.
@Algo+codehawk his pretend $110k in equity from the "appraisal" is most likely inflated. The appraisers always give you the number you want or close to it, they want to make lenders happy to keep getting work. This would never sell for $600,000 to any investor with a brain.
I was thinking the same thing. I would suggest having the tenants pay all utilities. so 400 + 250. 650 a month sounds alot better.
@@renpro2918 I hope not. That'd be terrible footage for a RED haha.
I don't see anything for maintenance or vacancy in that breakdown.
Hi
OmegaGrape - hello!🤙
wow, takes money to make money.
Did anyone notice that they invested $174k and ended up with $110k equity in the end. $64k vanished! This video was made in 2019 and property values have gone up. That's the only part of this investment that was a slam dunk!
Equity meaning on top of the 174k meaning when they was done the house was worth 174k plus 110k so total house worth was 284k
Let’s hope the property tax doesn’t go up because it will definitely eat at your cash flow
More Canada.
Top Secret Bear - BOOM!🙌🔥
You have $60,000 left in the property after the refi.. that's only an 8% annual return on $60k. Why is your investor investing with you on these properties? This deal doesn't make sense. If you're paying them 8% you have no cash flow yourself. How are you making money on these deals? Is someone banking on the perceived equity? Refinance appraisals and actual market price for when you sell usually do not go hand in hand. Another investor is not going to pay $600k for a duplex that. Their cash flow would be $200?
You invested $490k into a deal to make a net $409 per month? Congratulations on your 1% return, but you might have done better with a one year 1.55% US T-bond. Even if you only use your "equity" of $110K, your return is only about 4.4%. I hope your water heater doesn't break and you lose a year of profitability. I hope you don't lose one tenant for three months. Or literally any other contingency.
Can someone explain to me in simple terms why this even begins to approach any sort of reasonable risk-adjusted return? Because to me it just looks like you took a $400k loan and are gambling with it.
Michael Wakeland good point I’m thinking the return will be much higher once the loan is paid off in 30 years?
he said the loan was refinanced. He is playing with the house money and only leaving about 40K in the deal. Cocr needs to be calculated on actual cash in deal, not purchase price, unless he paid all cash for it which wasnt the case.
literally exactly what I was thinking myself...
@@cliffc12utube CoCR is an accounting trick, your long exposure is still equal to the purchase price plus renovation. You're essentially saying "My return is 1%, but if i leverage 95% of the purchase price my return can be 20%!" Congratulations, you've just discovered what a loan is.
Michael Wakeland a loan that’s being paid back with someone else’s money
Did you seriously not include Capex
You look like patty mayo
You invested 170k and "expect" to get 110k from the refinance? Wayment
This is a horrible deal