My First Investment Property

[Jack Perfett]

Investment Info:

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

Purchase price: $320,000
Cash invested: $34,155

Finances of deal:

Down Payment: $11,200
Closing Costs: $19,456
Repair Costs: (Installed Washer and Dryer + Misc. repairs): $3500

Cash to Close: $34,156

Monthly Expense:
Mortgage: $1387
Taxes: $371
Insurance: $126
Mortgage Insurance: $211
Vacancy (Reserve): $155
Maintence (Reserve): $155
Cap-Ex (Reserve): $155
Water & Sewer: $33
Garbage: $77

Total Monthly Expenses: $2669

Monthly Income:
Apt A (3+1): $2100
Apt B (1+1): $1000

Total Monthly Income: $3100

Monthly Cashflow: $431

COC: $15.1%

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

I became interested in small multifamily for my first investment because I needed a place to live and did not want to pay rent. A house hack was the best way that I could start investing in real estate as well as provide myself a place to live!

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

This deal was sent to me off market by my real estate agent who had a relationship with the seller. The seller was asking $340,000 and since this was the period where properties were selling over asking I offered $345,000 with 5k assist. The property then appraised at $320,000. We finally agreed on $320,000 with a new water heater, furnace, electrical box, and other misc. items.

How did you finance this deal?

Personally money for the down payment and a FHA loan.

How did you add value to the deal?

The rents were projected significantly lower than what I actually was able to rent it for.

What was the outcome?

The outcome was a rewarding yet stressful experience that I am still continuing to learn from.

Lessons learned? Challenges?

My biggest lessons learned was within the first month of me owning the property. Question everything that is in the inspection report. In the inspection report they mentioned that the kitchen sink drained slowly. I was a little confused because it was a brand new sink and plumbing. I figured it was no big deal. It turned out that the sewer line needed to be replaced which was a unexpected issue. Luckily I had the reserves and now have a lifetime gaunrentee on the new sewer line

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

Yes, I worked with an Agent and a Lender that I would recommend.

Realtor: Nick Mele
Lender: Nick Hussey