Out of State & Sight Unseen - My First Multifamily

[Greg Haygood]

Investment Info:

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

Purchase price: $185,900
Cash invested: $49,371

My first multi-family investment, a duplex in Cleveland Heights, OH. It took almost six months to close, i.e. lots of local red tape and other issues, but after three separeate re-negotiations, we closed the deal. It is also my first section 8 property. Most unique, I bought the property sight unseen from out of state, which is another first.

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

I wanted to buy my first multifamily home. With prices appreciating nationwide, I spent all of 2021 finding this deal. The projected cash flow provided enough downside protection for me to get a few things wrong.

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

I found it on Zillow. I have a great agent, and she knows the area well. I used her market analysis to craft an offer, and the owner accepted with no counter. Unfortunately, he is dealing with medical problems, so he is selling his investments.

How did you finance this deal?

I used a conventional mortgage, although it's my first investment property loan. Rocket Mortgage required a 25% down payment.

How did you add value to the deal?

In this instance, my value contribution was being patient to ensure I bought at a profitable discount to market. Real Estate assets are appreciating significantly nationwide, even in small markets. It was important that I chose a deal that still allowed me to cash flow. I had a few contracts that I lost on the way, and this deal seemed came to the brink. It was critical that I knew my walk away point before I began negotiations.

What was the outcome?

I collected my first rent payment this month. The HUD payment was deposited at midnight on the third, which was awesome. One tenant is late, although she is long time tenant, so I hope for the best.

Lessons learned? Challenges?

I truly believe my patience paid off. I knew what I wanted before I began looking, and I did not compromise.

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

My agent, Linda Pursely of Tower High Realty, is a rock star. If you are searching on the east side of Cleveland, OH, do yourself and your portfolio a favor and give Linda a call.