Using my first project as hard lessons learned

[Chevonne Woodard]

Investment Info:

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

Purchase price: $164,950
Cash invested: $80,000

My First multi-unit purchase, requiring more investment than projected. A test in patience, positive thinking, and self-trust. Getting over the challenges with missed taxes during the closing by the title company to contractor nightmares required me to be completely hands-on, willing to do my own research, and remain focused accomplish my goal through to the end.

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

During the property review it externally appeared to be move-in ready. The cost, location near a city planned redevelopment, and rental income potential.

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

My realtor sent me this deal, I attempted to pullout of the deal prior to the closing. Allowing for Seller to cover $10k in assistance and $6k to support plumbing repairs.

How did you finance this deal?

Property was purchased through the VA Home Loan financing with lender credits, and Seller Assistance.

How did you add value to the deal?

Updates to bathrooms, kitchens, new roof, landscaping, tuckpoint, new concrete laid around the building, window replacement, aluminum caps on all windows and doors, door replacement, and completed basement finishing.

What was the outcome?

After locating a trustworthy contractors coupled with my own shoulder grease vacant 3 bedroom unit was updated and successfully rented for $1532 to ensure the mortgage and expenses were covered. Providing $100 in cashflow and allowed to exist property into a second purchase. Vacated unit is currently yielding $1611 monthly projected cashflow to increase to $1200, after added deductions. Property value is projected over $130k above purchase price.

Lessons learned? Challenges?

Hire contractors slow, fire them quickly, change realtor quickly / work with several, ensure your realtor understands your investment goals, and has solid team / build your own team of inspectors. It is difficult to get contractors in Fringe areas.

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

No, not for the purchase.