HOUSTON FOURPLEX ON KELBURN

[Julie Chai]

Investment Info:

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

Purchase price: $750,000
Cash invested: $150,000

I bought this as a Buy&Hold and planned to have long term tenants in there. While we were in escrow, the seller/builder had used their property manager to create lease contracts for all 4 units. They said it was corporation leasing it out for their employees, but later we found out that it was for an Airbnb Arbitrage. They signed a 3 year lease and now I cannot get out of it.

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

I wanted to scale in the multifamily investments

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

It was listed for $800K on the MLS and I offered $750K and they accepted it.

How did you finance this deal?

I used my personal reserves to down 20% and got a DSCR loan.

How did you add value to the deal?

I did not have to add anything since it was a new build from 2020.

What was the outcome?

There was a discrepancy in the lease that I had missed and it ended up giving the tenants (Airbnb Arbitrage) a rent free month for their "staging".

Lessons learned? Challenges?

I'll make sure to not let the seller bind any lease contracts without me reading it first.