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Updated almost 9 years ago, 01/02/2016

User Stats

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Anthony Gayden
Pro Member
  • Rental Property Investor
  • Omaha, NE
3,308
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2,030
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My Third Deal, Another 4 Plex

Anthony Gayden
Pro Member
  • Rental Property Investor
  • Omaha, NE
Posted

Hello Bigger Pockets members. I am just sharing information about my potential third deal. The property is a 4 unit located in Tucson, Arizona. 

A little background first. Last year I bought my first two properties, a 4 plex in Phoenix, AZ which I bought with a conventional mortgage and 25% down payment, and a 4 plex in Tucson, AZ which I bought with an FHA loan and 3.5% down payment and owner occupy. The person that I bought the 4 plex in Tucson from actually owns another identical 4 unit property right next to the one he sold me.

So every once in a while I would see the guy as he fixed things and collected rents from his tenants. He often expressed how he was sick of being a landlord and was ready to sell the other property as well. Anyway fast forward to today and I tell him that I want to buy the other property from him. He agreed to owner finance the property with 20% down, 5.5% interest with 30 year amortization, and a 5 year balloon. Since I already own the property right next door, I know the price and cash flow are good, even though I will be paying a little bit more than I paid for the one I purchased last year. Also I am able to get around all of the bank's mortgage rules by owner financing and get into my third property a whole lot sooner than expected. 

Purchase Price $170,000

Down Payment $34,000

Interest Rate 5.5%

4 units, built in 1986, 800 square feet per unit, 100% occupied, Class C

Tucson, Arizona

Monthly Rent $2400 ($600 per unit)

Tenants Pay All Utilities

Property Management 7.5%, $180/month

Insurance $800/year (based on what I pay)

Taxes $1200/yr (based on what I pay)

  • Anthony Gayden
  • Podcast Guest on Show #21
  • User Stats

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    Anthony Gayden
    Pro Member
    • Rental Property Investor
    • Omaha, NE
    3,308
    Votes |
    2,030
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    Anthony Gayden
    Pro Member
    • Rental Property Investor
    • Omaha, NE
    Replied
    Originally posted by @Andrew LeBaron:

    Muy bien amigo!

    How close is it to UOFA campus! ?

     It's probably 1.5 miles from U of A, but the tenants aren't college students, but lower income working class. It is near I-10 and Speedway, if you know the area. 

  • Anthony Gayden
  • Podcast Guest on Show #21
  • User Stats

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    Anthony Gayden
    Pro Member
    • Rental Property Investor
    • Omaha, NE
    3,308
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    2,030
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    Anthony Gayden
    Pro Member
    • Rental Property Investor
    • Omaha, NE
    Replied

    Ok an update. I got the property under contract with $1000 earnest money last week. I just scheduled the inspection for early August with a close date of September 1st. 

    I'm getting excited. At that point I will have 3 properties, 12 units, $81,600/yr in gross income with the properties valued at around $510,000. All in my first 1.5 years. I set a goal when I started to buy $1 million in investment real estate in 5 years and I am half way there.

  • Anthony Gayden
  • Podcast Guest on Show #21
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    User Stats

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    Kelly N.
    • Investor
    • SE, MI
    461
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    Kelly N.
    • Investor
    • SE, MI
    Replied

    Awesome!  Great job, and it'll be nice to have two so close together!  

    User Stats

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    77
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    Justin Ellis
    • Property Manager
    • Scottsdale, AZ
    77
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    Justin Ellis
    • Property Manager
    • Scottsdale, AZ
    Replied
    Originally posted by @Anthony Gayden:

    Ok an update. I got the property under contract with $1000 earnest money last week. I just scheduled the inspection for early August with a close date of September 1st. 

    I'm getting excited. At that point I will have 3 properties, 12 units, $81,600/yr in gross income with the properties valued at around $510,000. All in my first 1.5 years. I set a goal when I started to buy $1 million in investment real estate in 5 years and I am half way there.

     You're a true inspiration Anthony, congrats.  I love seeing it CAN be and IS being done in Tucson,  I hope everything goes well. Get's me fired up!

    User Stats

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    Anthony Gayden
    Pro Member
    • Rental Property Investor
    • Omaha, NE
    3,308
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    Anthony Gayden
    Pro Member
    • Rental Property Investor
    • Omaha, NE
    Replied

    @Justin Ellis Thanks, it can be done anywhere. I am already making plans for my fourth property.

  • Anthony Gayden
  • Podcast Guest on Show #21
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    Arlan Potter
    • Investor/Accountant/Builder
    • Meno, OK
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    Arlan Potter
    • Investor/Accountant/Builder
    • Meno, OK
    Replied

    Very nice.

    And the renters buy the property for you.

    User Stats

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    Anthony Gayden
    Pro Member
    • Rental Property Investor
    • Omaha, NE
    3,308
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    Anthony Gayden
    Pro Member
    • Rental Property Investor
    • Omaha, NE
    Replied
    Originally posted by @Kelly N.:

    Awesome!  Great job, and it'll be nice to have two so close together!  

     That is exactly what I was thinking. It will make management so much easier. There are other small multi-family properties in the same neighborhood and in the future I may look at acquiring those as well. 

  • Anthony Gayden
  • Podcast Guest on Show #21
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    Tiffany Youngren
    Pro Member
    • Investor
    • Billings, MT
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    Tiffany Youngren
    Pro Member
    • Investor
    • Billings, MT
    Replied

    Momentum is a beautiful thing! Congrats, Anthony, and hope it's continuing to go well!

  • Tiffany Youngren
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    Brandon Holley
    • Lenexa, KS
    53
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    206
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    Brandon Holley
    • Lenexa, KS
    Replied
    Congratulations! It's exciting to hear of your success, I hope the new property is a blessing for you!

    User Stats

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    Kelly N.
    • Investor
    • SE, MI
    461
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    Kelly N.
    • Investor
    • SE, MI
    Replied

    That's great @Anthony Gayden!  We are under contract on #4 and #5, and they are next door to each other as well.  Our first one is about a block away and the other two are a few blocks away and close enough together that I can show people apartments at both if I have similar units coming up.  I love being able to drive by everything within a few minutes!

    User Stats

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    Robert Meyer
    • Arizona
    3
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    Robert Meyer
    • Arizona
    Replied

    This is awesome Anthony. I was wondering what the plan is in 5 years when the balloon hits? My understanding is it would be refinanced with a traditional lender? If that is the case have you heard if there is a limit to how many investment properties you can have? Is it a concern that when the balloon hits you wont be able to pay the seller in full? I am EXTREMELY curious about this because I would love to utilize this tool of seller financing. I am currently attempting to buy a foreclosure in Vail for a live in flip with a VA loan. Most likely stay there 2 years to avoid capital gains and attempt to sell it for a profit. I did work the numbers so I would be able to cashflow it a little bit in the event that I dont sell it for a profit. Again, Congrats! Your story truly is an inspiration. You are following the path I want to go down!

    User Stats

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    Jorge Soto
    • Firefighter
    • Sacramento , CA
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    Jorge Soto
    • Firefighter
    • Sacramento , CA
    Replied

    What a great success story! Congratulations on your new property. 

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    User Stats

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    Anthony Gayden
    Pro Member
    • Rental Property Investor
    • Omaha, NE
    3,308
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    Anthony Gayden
    Pro Member
    • Rental Property Investor
    • Omaha, NE
    Replied

    Unfortunately, this deal fell apart due to me moving across the country.

    https://www.biggerpockets.com/forums/48/topics/222507-third-deal-falls-apart

  • Anthony Gayden
  • Podcast Guest on Show #21
  • User Stats

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    Jill DeWit
    Pro Member
    • Investor
    • Scottsdale AZ
    423
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    Jill DeWit
    Pro Member
    • Investor
    • Scottsdale AZ
    Replied

    @Anthony Gayden

    Congrats! Sounds like you are doing everything right! Slowly building up your empire. 

    Thanks for sharing with us all!

    (I lived in Tucson for a bit and know the area. Nice job!)

    -JIll

  • Jill DeWit
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    David Lecko
    Professional Services
    Pro Member
    • Rental Property Investor
    • Indianapolis, IN
    88
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    143
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    David Lecko
    Professional Services
    Pro Member
    • Rental Property Investor
    • Indianapolis, IN
    Replied

    @Anthony Gaydenthanks for keeping us updated and sorry to hear about the third deal falling apart. Sounds like no deal is better than a bad deal since you needed the cash.

    You mentioned you owner-occupied one of your existing 4 plexes.

    Can you tell us more about how you handled landlord duties and being the owner while living with your tenants?