5plex seems great, but terrified!

[Monica Ponton]

I have found a 5plex about 2 and a half hours away from me. It looks to be in amazing condition with little need for renovation. I do believe I could add value with very light cosmetic upgrades and a central HVAC system which a have a good friend willing to do at a great price. The price is right for me and the numbers seem to work every way I spin them. But that's the problem... I found it on the MLS and it makes me concerned it is too good to be true. It would be my first investment and my 1st commercial loan. I'm looking for any and all advice here! I'm terrified of making a huge mistake, but equally terrified to pass on an amazing deal that could get me in the game! Looking for any and all advice here! Thanks everyone!

[Jody Sperling]

I've only regretted the deals I passed on. Last summer a house came up on the MLS two blocks from my primary residence. It was listed for $125,000 whereas houses on that block were selling for around $200,000. I had my agent take me through the property, and decided to put a cash offer for asking price in. I lost out by $1,000. The house went to a flipper, and five months later returned to the MLS listed at $225,000. It sold for $238,500.

Needless to say, I feel regret at not analyzing better and making a stronger offer. Plenty of upside, and I would have held it as a rental too.

Contrast that with the house I'm living in now, one I bought for $31,000 that had a strong foundation but not much else going for it. I thought I was looking at about $100,000 all in with an ARV of $150,000, and though my ARV will probably be roughly correct, my roof alone cost $38,000. I'm going to end up breaking even on this house (i.e. zero expense or profit), and still I don't regret it because I get to use it as education on pitfalls I didn't know to watch for.

Take the plunge. If you miss something, you'll learn and grow. But if you sit out, let fear dictate your life, you'll miss out on something wonderful and freeing. Best of luck!