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Updated almost 3 years ago on .
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Number 9 - Second Quad
Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $238,900
Cash invested: $90,875
Contributors:
Mike Ernest
Long-term buy & hold property. 2nd quad. Purchased as part of a package deal with 2 other quads. Turnkey purchase.
What made you interested in investing in this type of deal?
I've been looking at Quad's in Indy for some time. In reading Brandon Turner's books and watching his YouTube videos, I really started to hone in on "The Stack" as a tool to scale and grow my portfolio faster. This deal was part of a set of 2 other quads, and it helped me double my previous door count very quickly.
How did you find this deal and how did you negotiate it?
The quad happened to pop up in my email from realtor.com along with two other quads. It just hit me at the right time, and the fact that it came as part of a package with the same seller, helped to put this deal under contract because we offered on all 3 at the same time.
How did you finance this deal?
Traditional Fannie Mae/Freddie Mac financing. Straight purchase with conventional financing.
How did you add value to the deal?
No value was added. This was a turnkey purchase.
What was the outcome?
We closed on this property at the same time as another quad that is literally 25 feet away. Very smooth and successful closing with minimal issues.
Lessons learned? Challenges?
The biggest challenge on this transaction was the appraisal that came in low. We were under contract for $238,900 with a full appraisal gap. The appraisal came in at $205,000 which increased my cash to close. While it was unfortunate, it didn't really change our cash-on-cash return much. While it wasn't ideal to dump more cash into the property, it did improve our monthly cash flow a little bit with a lower PI payment on the loan.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes. Mike Ernest with Team Endicott at Keller Williams. He has been an essential power partner for me in Indy, and has helped me scale my portfolio while being a powerful ally. He is a vital member of my core four.
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- Seth Wilcock
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