Multifamily purchase in Milwaukee

[Qulia Brunson]

Investment Info:

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

Purchase price: $116,999
Cash invested: $17,779

Long term buy and hold with tenants in place and minimum repairs needed.

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

This was a partnership deal where I syndicated with a newer investor in exchange for my experience and expertise. The investor was local to this area and wanted a multifamily property that already had tenants in place to lessen the vacancy rate.

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

We used a local realtor to assist with the contract and negotiations. We negotiated the purchase price and seller repairs, since they were initially planning to sell as-is.

How did you finance this deal?

We financed with a conventional 30 year mortgage with 20% down.

How did you add value to the deal?

I analyzed each potential property that my investor partner was interested in by determining the IRR, cap rate and monthly cash flow.

What was the outcome?

We secured the property for less than asking price, seller agreed to make some minor repairs, increased rents by $100 since they were under market rates, and acquired a reasonable property manager.

Lessons learned? Challenges?

We had some challenges with the insurance company and property manager. Originally the insurance company did a full inspection and determined that more repairs were needed cover the property. The original property manager had a great rate but wasnt responsive after a few attempts. This caused us to do more research and ultimately decided to use a different insurance company and PM. Lesson learned-have more than one company to interview.

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

We worked with a realtor, lender and property manager all local to the area.