My third investment property

[Tim Mieney]

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $157,500
Cash invested: $25,000

My third investment property, a 5-plex. All units are 1 Bed, 1 Bath and have been perfect for college students attending nearby SUNY Brockport as well as younger couples looking for an affordable place to live. This has been one of my favorite properties to own, despite there being a bit higher turnover rate due to the 1 Bedroom units. Maintenance has been very manageable with minimal large expenses incurred so far.

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

It was one unit larger than my quad so I loved the idea of scaling and it was also very conveniently located about 6 minutes from my house.

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

A friend of a friend was looking to sell and I got wind of it. I met the sellers at their house, we negotiated a price and I had my lawyer write up an offer.

How did you finance this deal?

A combination of a HELOC and my own funds.

How did you add value to the deal?

Better management systems than previous tenants were used to. We've updated a couple of the units when vacancy allowed for it. Rents were below market at purchase and we have steadily increased them to get to market rates.

What was the outcome?

Still holding. We're having some water issues in an upper unit so we'll be redoing the roof and some windows this spring.

Lessons learned? Challenges?

Get an insurance quote before purchasing. I didn't realize this would be categorized under commercial and our insurance is about 4x what I had originally planned on. We're also getting public water soon and that added quite an expense to our tax bill because we're being charged for 5 dwellings, so rents will unfortunately be going up. But tenants will have nice fresh public water now.