First Multifamily Deal

[Billy Daniel]

Investment Info:

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

Purchase price: $118,000
Cash invested: $24,000

Contributors:
Dustin Brown

Small duplex with tenants in place. Bought from a disengaged landlord and immediately started adding value and raised rents. Financing was a commercial loan with 5 year ARM and down payment brought by partners.

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

On market! Our offer was based on the numbers that worked for us and they accepted!

How did you finance this deal?

Commercial loan with 20% down payment.

How did you add value to the deal?

Immediately began making repairs to neglected equipment (HVAC, roof, water heater). Raised rents to market value.

What was the outcome?

Great cash flow which should get even better in the coming months!

Lessons learned? Challenges?

Previous owner was very lax with records. The leases were nearly illegible. The deal was still too good to pass up, even if it was a tough decision.

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

I acted as the agent so yes, I recommend him, lol.