Property 1: My Introduction to Real Estate Investing

[Aniqah Kalam]

Investment Info:

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

Purchase price: $700,000
Cash invested: $800,000

I operate a retail business on the first floor of this mixed use building and have 3 residential tenants.

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

I was initially looking for a store to rent to open a second location of my retail business. While I was driving around in the area, I saw this property for sale on the exact block I wanted to rent a store. I decided to call up the owner and see what he was looking to sell for and we came to an greed price. I ended up purchasing the building in cash with the money I'd made so far with my first retail store and savings. This is how I got my foot in the door of real estate.

How did you finance this deal?

I purchased it in cash because at the time, I didn't like the idea of having a mortgage hanging over me.

How did you add value to the deal?

I did rehab on this building for about 100k

Lessons learned? Challenges?

I ended up spending more money on the rehab than I was expecting. Had I known the extent of the rehab that was necessary, I would have asked for a lower purchase price. Although I had offered a lower price than the owner's asking price, he immediately accepted my offer. In hindsight, my offer was probably still too high and I could have negotiated an even lower price.