My first off-market deal without an agent and found $37,500!

[Tyler Halstead]

Investment Info:

Condo buy & hold investment.

Purchase price: $192,500
Cash invested: $25,000

This "condex" is a shared side-by-side duplex in the north end of Manchester. Each unit has 2 bedrooms, 1 bathroom, with about 1,000 square feet not including the unfinished basement. There are no HOA fees for the property (which is in a 2 party condominium association) and water/sewer/master insurance are split between both owners. The property is located in a cul-de-sac directly beside a duplex that I purchased in 2020.

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

I've already invested in the neighborhood and really like the class B area (low vacancy rate, close to major highways, and near large employers). I believe that this neighborhood will continue to go up in value, and wanted to double down during an uncertain time with high inflation and fears of interest rates rising. I typically look for multi-family properties - but since this was located next door and I knew the other owner, I felt confident in moving forward with the condo deal.

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

Off-market, word of mouth referral and I negotiated directly with the seller for $7,500 under what she would've listed it. I also secured a right of first refusal agreement with the other owner in the association, allowing me the first opportunity to purchase once he decides to sell (currently rented to a family member of his).

How did you finance this deal?

Traditional conventional homeowner loan with 5% down at 3.375% rate. Prior to any rehab on the property, the assessor valued the property at $37,500 higher than what I paid.

How did you add value to the deal?

We have currently repainted, added LVP and LVT floors to the kitchen and bath respectively, replaced the furnace, and updated wiring, outlets, and fixtures throughout.

What was the outcome?

Finishing up the rehab so we can move into this unit, allowing us to rent the entire duplex next door. After the house-hacked unit is rented out, we should cashflow $500-$800 per month after expenses.

Lessons learned? Challenges?

Always anticipate the worst to happen. I priced in a major capital expenditure with my offer price, but did not anticipate for that cost on day 1 of ownership. This $5,500 cost was necessary -- and even though it bit into my immediate profits - since I plan to hold the property for a long time, it was going to have to be done at some point!

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

My loan officer and title company were excellent to work with - highly recommend Megan Pepper and Barristers Title and Closing (both located in greater Manchester area) for their service! Both were used in each of my real estate transactions (now up to 3 units) and I couldn't be happier with their service and expertise.