3rd Investment Property/ Rhode Island

[Joe Rodriguez]

Investment Info:

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

Purchase price: $427,000
Cash invested: $15,000

Just closed on this 3 unit property in West Warwick, RI for $427k. 2nd and 3rd floors are currently rented and cover all expenses. I will be looking to rent out the first floor this month which will serve as the profit and monthly cashflow.

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

The numbers make sense in this very competitive market. I usually invest in Providence, RI, but started to expand my search area with the competition and small inventory.

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

I found this deal on MLS. I am a licensed real estate agent in MA and RI. I represented my wife as the buyer.

How did you finance this deal?

My wife and I financed this deal using FHA in her name since I already have a couple of properties (one with FHA) in my name.

How did you add value to the deal?

I plan on doing some cosmetic upgrades to the vacant unit. Once the existing tenants move out, I will upgrade those units as well.

What was the outcome?

Recently closed on this property. Once the first floor unit is filled, cash flow should be between $1000 - $1200/ month.

Lessons learned? Challenges?

Look beyond messy tenants. I saw this property when it first hit the market but because of a messy tenant, I decided not to submit an offer. It went under contract and then fell through. The agent called me back and I took a second look at it. I pushed past the fact that the existing tenants were messy (as I am very neat and clean) and just focused on the numbers. When I did, the deal made sense so I submitted an offer and it was accepted.

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

I represented my wife on this deal.