First 4-Unit Purchase in 2012

[Lynne Hart]

Investment Info:

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

Purchase price: $104,000
Cash invested: $150,000

Short sale 4 family purchased and now updated in the historic Shaw Neighborhood. Renting at 500/unit originally, now at 950-1050

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

This was my first multifamily purchase in 2012.

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

The real estate agent (this was before I had my license) I had at the time was aware of this property coming onto the market as a short sale.

How did you finance this deal?

Conventional Financing on a 30 year loan

How did you add value to the deal?

Renovated all of the kitchens and baths, opening some kitchens to living areas and converting the upstairs units to have the front room qualify as a second bedroom, if desired by tenants.

What was the outcome?

The building cash flows steadily and has awesome renters. Its current ARV in 2022 is about $550,000 but I wouldn't sell it because I love the cash flow so much!

Lessons learned? Challenges?

This building was my first official project so I learned lots about working with contractors, construction, what things cost and how to manage tenants.

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

These days I am my own real estate professional, I got my license because I found many of the agents I worked with weren't investors themselves. I learned a ton by beginning to sell real estate for and to others, and these days I work almost exclusively (there are exceptions) with investors, many of those who invest in apartment buildings like these and bigger!