First Real Estate Purchase - 4 plex

[Christopher Vrondran]

Investment Info:

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

Purchase price: $155,000
Cash invested: $20,000

This is a 4 unit property. Found the deal through a co-worker. The seller agreed to seller finance this deal with $15,000 down on a 3 year balloon at 5% interest. Occupancy was at 75%. The 4th unit needed cosmetic repairs. I actually bought this before even owning a personal house.

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

A co-worker's brother mentioned to my co-worker that he was thinking of selling this property because he had too much going on. He initially wanted $195K for it. I used Chris Voss' strategies from his book Never Split the Difference and I was able to get him to agree on $155K.

How did you finance this deal?

This deal was seller financed on a 3 year balloon at 5% interest.

How did you add value to the deal?

The 4th unit was vacant when I purchased this property. We are doing a light rehab by putting laminate flooring, new countertops, painted kitchen cabinets, replaced some interior doors, rehabbed the porch, and gave it a new coat of paint.

Lessons learned? Challenges?

Learned how to put together a purchase agreement and get it to title. I learned that you need to stay on top of the title company if you haven't heard back from them for a few days. When the title company ran the search, the seller and the previous owner never filled the deed stating that the last land contract had been fulfilled. This wasn't found out until 5 days til closing.