Multi-Family in Paterson NJ

[Lyanne Giraldo]

Investment Info:

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

Purchase price: $420,000
Cash invested: $30,000

My first investment property. House hacked this multifamily home for one year and moved out and rented my unit. First and second floor have 3 bedrooms each at $1800 a month, third floor has one bedroom for $1250 a month. All units have rental assistant programs so rent is guaranteed every month. Units were completely renovated. Cash flowing $1600 after all expenses were paid. Follow me on install @lilyhasthekeys_I did a whole segment on using rental programs

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

North Jersey is a hot spot with a lot of people from NYC moving across the water for lower rents, more space, and peace of mind from the hussle and bustle. Paterson is still a neighborhood in transition. It's definitely rough but there is constant new construction of luxury buildings and beautiful multi families. I saw the opportunity and decided to jump in while I had the chance. Also the house was fully rented.

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

I found this deal using a realtor that specializes in multifamily homes in this particular area. House was listed for 460k. Appraised at 420k. Realtor spoke with seller to get it at the appraised price due to repairs that I would be doing.

How did you finance this deal?

FHA loan- house hacked. 3.5% down

What was the outcome?

House has increased in value 50k over the course of 1 year. Had to do some repairs but that comes with the territory. These houses are older. All my units are occupied with tenants with rental assistance, I have guaranteed cash flow every month paid by the state. I also have storage units in the basement. I charge $50 a month, increasing my cash flow.

Lessons learned? Challenges?

House was purchased without a NJ green card (state inspection), had open violations with the fire department and state. Amending all these issues cost me time and money (5k). Multifamilies in NJ require lots of inspection to stay up to code. Follow me on instagram as I have my journey documented on my highlights lilyhasthekeys_