Adding a duplex to the portfolio

[Gregory Schwartz]

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $210,000
Cash invested: $56,500

Purchased this house this December for 210k (immediately appraised for 228k). Rents are $1000 per side and are currently rented with section 8 tenants. Our plan is to update the units with 5-8k per unit driving the rents to $1100-1200 per unit. We'll enjoy the increased cash flow while we pay down the loan. In 2-5 years, we'll refinance the property using the cash to buy the next deal.

What made you interested in investing in this type of deal?

Small multifamily in Bryan and College Station, TX is my niche.

How did you find this deal and how did you negotiate it?

This was mentioned in the realtor comments for a similar property listed on the MLS.

How did you finance this deal?

Commercial loan, 25% down, 20-year amortization

How did you add value to the deal?

We should be able to increase rents to $1100-1200 per side with some minor cosmetic updating. It appraised for 228k but similar duplexes sell for 250k+.

What was the outcome?

TBD. We plan on refinancing in 2-3 years as part of a BRRRR game plan.

Lessons learned? Challenges?

It needed a new roof, I was nervous to ask but the seller happily paid for half of the total cost prior to closing!! Always ask, the worst that can happen is they say no.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

ExtraCo bank provided the commercial loan for this purchase and are very easy to work with!