A 2 unit lesson learned

[Kevin Murphy]

Investment Info:

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

Purchase price: $109,000
Sale price: $150,000

Student rental at Cornell University. 2 units. Got in without understanding the numbers which made it really difficult ultimately.

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

It was owner financed

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

I was a real broker at the time and I offered a deal which the owner accepted with 10% down

How did you finance this deal?

I offered 10% down at 6%

How did you add value to the deal?

I fixed it up and got it rented

What was the outcome?

the house appreciated in value but the monthly cash flow was not sufficient to cover costs

Lessons learned? Challenges?

1. Always make sure you can cover monthly expenses.
2. if the numbers don't work...... walk away