Duplex Investment Property Conversion Walkthrough & Financial Breakdown (Before Renovations)!
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- Опубліковано 13 лис 2019
- In this video, real estate investor Mat Piche, AKA the Fruitful Investor, takes us on a property walkthrough of his investment property - a single family home that he'll be converting into a duplex!
This is an awesome deal and real estate investment strategy that you are going to love!
We hope you enjoy this video and if you do, make sure to leave a comment and DESTROY that like button!
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Subscribe to our channel and check out Mat's other videos on his channel The Fruitful Investor! - / kwpropertypro
Who is ready to see the after 😬🙌?!
Let us know below!
BiggerPockets Do you need permits or zoning to make the basement a separate apartment
I've been watching your videos for a week now. Thanks for all the info 👍
BiggerPockets can’t wait!
Yes, definitely want to see the after.
@@danielkelvin1036 thanks alot... they were very helpful...
Love the sound proofing tip. Big issue with duplexes are noise complaints. Better to take care of that now before folks start living in there.
The Wong Mindset - you got it! Keep your tenants happy so they keep paying that rent!🤑🔥
@@danielkelvin1036 thnks alot....
How much more is that going to add to the cost?
@@theforce5191 i dont understand your question..
@@theforce5191 Roxul (Rockwool) insulation is about 50% more $$ than fiberglass insulation. 5/8 fire-rated sheetrock is a bit more than 1/2 normally used elsewhere. Still, none of it is a huge deal. It might add $1500-$2000 to the project (maybe $2/sq ft 1\+/-)
Everything sounds so nice and easy u never hear about the horror stories... plus, everyone needs alot of money to start! Not as easy as they make it seem!
*Real* *estate* *is* *my* *favorite* *way* *to* *invest* . Just keep in mind that if you plan on purchasing a property to rehab and rent out, have about 20% of the purchase price in reserves in case any surprises happen along the way. Cheers!
Matt, love the numbers break down! Great work on the duplex! Flip or hold, great deal! I normally focus specifically on one or the other, but when either strategy can work you know you got a winner! Thanks for sharing!
No problem!🤑👊
@@danielkelvin1036 thanks alot.....
We want more of this great knowledge.
Great thought provoking video. I have some exploratory questions for you? 1) How do you deal with outdoor space like the backyard? If there’s an issue with say electrical upstairs and that tenant has to strip the breaker in the basement, how does that work?
Matt, love the numbers break down! Great work on the duplex! Flip or hold, great deal! Thanks for sharing!
RAM Real Estate Investing - no problem man!🙌
How do taking zoning laws into consideration when converting single family to duplex? What's that process like in your area/what are the costs associated?
Help. (Love these videos by the way)
I have a split level I house hacked. I wanna move out and rent it completely but I’m confused on a few things.
My electric isn’t split, only 1 Hvac for whole house. Who cuts grass? How do I make it where they pay own bills. Even the cable seems confusing? Want to move forward but don’t want to rewire and cable my whole house
For splitting the heat, have you considered keeping the furnace heat for the upstairs unit and using electric baseboards in the basement? This allows splitting of hydro and gas. We're doing this on our current project.
Seems like a good idea, I got a house I'm looking to purchase that has one gas meter for the furnace, but already has two electric meters, so trying to decide how to do heat... thought abt installing a heat pump for the basement unit...
This is GREAT!
Man this is magic
@Mat Piche How do you deal with tenants that share the heat/cooling? One says it's too cold and the says at the same time it's too hot.
Have an HVAC company split the zones for you. Each will now have a thermostat that will control each unit. Not easy and could be costly.
Hey Matt is there a link to where we can see an example of that drywall/backer board 5/8" install you mentioned at the 3:00 min mark?
I'd really like to see a visual on that type if code install you talked about.
Thanks in adv!
It’s a 1-hour rated fire barrier form of Sheetrock that is installed the same as traditional Sheetrock, in addition to the fire resistant Rockwool insulation that acts as an incredible sound barrier.
www.thisoldhouse.com/walls/21173181/why-not-use-fire-rated-drywall
TY 😊
Trying to follow the math here. I’ve only seen the examples you referred to where people get all the money back and then some from the cash out refinance. If I understand correctly you still owe your partner $16k so it will take roughly 3 years to pay them off before you truly cash flow? Assuming you have no unexpected maintenance costs.
What do you do when you need access to the mechanicals?
I bought my duplex for basically closing cost only! I put down land I own as a down payment.
Always y’all to your local banks people. They can really work with you!
Travis Williams - BOOM!🔥
a $426.00 return from 16K out of pocket is exceptional! I'm netting 1K a month after putting 160K cash down. That's NYC for you!
Try some out of state investing. NYC is tough haha
Is there specific area in Kitchener to buy? With scope of flip, as first time home buyer, can I put 5% down?
5% for property manager really makes the deal work.
Damn key that kitchen and wood work
Keep
When you split the Hydro between both tenants, is it half and half or based on usage for each? I assume it depends on how advanced your metering is.
@@danielkelvin1036 thanks alot.... they were very helpful....
I'm new to this whole business but I THINK that'd be an awesome 31% Cash on cash return!
Do you have to rezone this from a single family dwelling to a multi family? It sounds like you've done this before so what does that cost?
Kaleb Belcher - it’s about $250 for the permit fee, that’s it! My area is super
progressive because we need more housing! Also, I only look for properties that ALREADY have the zoning to do a duplex. Then it’s super easy! I’m not interested in actually changing the zoning. That costs too much and takes too long👎
Thanks for the reply! I'm in the Fayetteville, AR which is growing fast but the demand isn't quite that high yet. Great information for if that does become the case though. I appreciate it!
Maybe I'm just dumb and missed it but what is his partner getting out of the deal? He said he's gonna pay the partner $164k and then they're $16k into the deal. I assume his partner is getting some of that rental income?
Yeah that means he’ll still owe partner til the 16k is paid off and only them will he make money. With quick calculations it looks like it’ll be roughly 3 years before the 16k is paid. How is this a slam dunk, I don’t get it.
What is the cost to Re-zone the property to allow the Duplex? Where I'm from the Township Code needs to be applied or you'll lose money later with court fees and fines.
RG - it’s about $250 for the permit, that’s it! My area is super progressive because we need MORE homes here🙌
Can u tell me the three names of the dry wall for soundproof couldn't understand you.
ROXWUL and 5/8 inch insulation instead of 1/2 inch
Um... there is no calculations for repairs or vacancy??? 🤔 seems like this is going to be a break-even.
As well as lawn maintenance, capex, etc..
Diego Lopez
Negative cashflow baby!
In reality, you make your money on a flip based on purchase price.
An American Entrepreneur
🤔 But this is a buy and hold, not a flip.
Diego Lopez - Tenant’s do all lawn and snow on duplexes😉
How does the Zoning Code allowed you to convert single family to a duplex ..
And do you also added a 2nd Kitchen to the basement apartment ?
SUDHAKAR AARLA in Ontario there’s a housing shortage. Government has permitted duplex conversions provided they’re done to code with fire and sound proof separation. Separate entrances and minimum of 2 parking spaces side by side not tandem long single driveway. And rents are very high
Can someone explain why he's keeping the property long term? Especially when he can cash out for 105 thousand? Why would he keep a property that cash flows 400?
Would love to see the renovation on this! Nice deal!
Nate Moore - it’s coming out soon!!🙌
@@danielkelvin1036 thanks alot.....
Is there a good video on determining renovation costs?
@@danielkelvin1036 trusting hackers with 1000s of dollars that they don't even need to steal money has nothing to do with the question I asked...idiot
duckduck go, that dude is spamming, saying the same thing on dozens of the comments
When you convert this from single family to a duplex are you changing the address? Ie 123 apple st to 123-124 apple street? Any other steps with the city?
Probably not, just say apartment A and B, I've lived in places like that
If my math is correct, you're looking at a 31% cash on cash ROI. Not bad, Mat!! Not bad!
What was the result?
Does he add laundry upstairs?
The math in this video thru me off for a complete loop. Can you clarify how all that changes
Those kitchen cabinets didn't look in bad shape at all for a rental. Why not just paint them white, get a new countertop and add a backsplash?
@8:00 some explain I got slightly confused.
If the value of the house goes down like 2008 do is affect your mortgage payments?
No
You get a fixed rate mortgage.. doesn't matter what happens in the market he won't pay more.. worse case scenario is rents go down slightly for a year and you make 200 a mo instead of 425 a mo, but in a hot market like that that's about as likely as a snowball in hell.. people are dying to rent those houses that's how he does 0% vacancy rates
What square footage do you try to hit?
@@danielkelvin1036 they were very helpful...
I see black and white
Does a va loan work better for investment properties such as a duplex than a 203k loan/vha loan?
It ways around it. Some say you have to live in it for 12 months. Some people buy then rent it out immediately.
@@xr3703 understood. But which is best for investment properties or would it depend on financials as to how much cash you have to put in etc?
@@apairofpears VA loan no cash down. I'm very new to realestate I don't want to tell you anything that is incorrect. The VA prefer us not use the VA loan on property investment. The VA loan does allow you to use up to a certain amount of units at once. As long as you "are a resident in the multifamily home".
@@bill_the_butcher appreciate your input on the matter.
9:52 What's a hydro meter?
AdamUPNow
Electric meter. He’s in Canada.
What do you guys call electric?? Haha🤣
@@NOBLEHTX I'm confused even more now. He said hydro like in water? Is it a meter be for electricity or water?
AdamUPNow
It’s your electricity bill. They use hydroelectric dams.
The Fruitful Investor The Fruitful Investor
We call electric( hydro), Light bills!! Hehe😁
Hey Mat.Does that mean that this house is a good flip for short term? As in we are in for 495000 and ARV is 600000, so we can pocket that 105000 straight away right? Also if yes, that means you are looking at bigger picture and when that sells for example 800000 after 5years , means that you pocket the difference of 200,000 dollars AND the 105,000 leftover Equity. Am I right??
Wow, in Michigan that house would be around $200k turnkey ready.
Yea but who wants to live in Michigan?
@@adnankazim88 People that like 4 seasons, lakes, camping, motor sports, hunting, and fishing.
Via new mortgage and 80% LTV
spending way too money upstairs,... paint trim with stain block instead of replacing , paint kitchen cabinets and add new hardware + countertop, refurbish hardwood floors or put new flooring on top
Your partner put in $180k and got back $180k. What's in it for him/her? Why would a partner put in money when there is no investment gain?
Maybe they are splitting the cashflow
50/50 split on cash flow and appreciation
395k for that piece. holy cow. I buy houses like that for $15,000 cash in my area.
How do you get a 3% rate on your loan? Thanks!
@@danielkelvin1036 thanks alot...
what is hydra?
In canada they call electric Hydro
Hydro. We have a lot of Hydroelectric dams here. Hydro is electricity bill. That's why he said he convert the duplex to split the hydro ( separate electric meters ) but normally pays for the gas and water. Hope this clears it for ya
aah! thx. yall crazy canadians :)
Alan 🤣🤣
Daniel kelvin are you seriously gonna post this on every comment👎🏾
I'd like a brick backsplash in my kitchen... LMAO what were they thinking?
@@danielkelvin1036 thanks alot...
THANK YOU FOR THE AWESOME ADVICE, ITS A GREAT VIDEO FULL OF USEFUL INFORMATION- PIERCING INSTINCTS PROPERTY MANAGEMENT #FOLLOWUS
Cut back on the slow motion shots... Or, if you have to use them, at least focus-pull through the shot to guide the eye. Yes, more difficult, but otherwise the shot is no good and should not have made the final edit.
That’s an expensive ass duplex. What are the rents????
What if the tenants dont pay? Bet u never hear about their losses ... gotta be smart people