First Investment landed me 4 doors on 4/4

[Heather Gates]

Investment Info:

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

Purchase price: $305,000

Quadplex purchased and currently updating, raising rents and focused on getting all 4 units rented. This is Section 8 housing. I am currently not taking any profits for vacancy reasons. I got a commercial loan at the bank I work at as a Treasury Management Officer and used a HELOC for my down payment and closing costs. I have since sold my primary residence and the sale paid off the HELOC.

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

I am attracted to multifamily for the security in numbers.

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

I found it on the MLS. I contacted the realtor who listed it who was also the seller. I went and looked at it the next day with my toddler on my hip and made an offer the next day. I dealt directly with her since her not having to pay another agent commission sweetened my offer. This was March of 2022, there was no negotiating. I actually paid 5000 over asking.

How did you finance this deal?

Actually I put in an offer and it got accepted before I knew how I was going to fund it. I saw it and knew I wanted it. I started calling my hard money lenders I knew of and actually one of them gave me the idea to used a HELOC since I owned my home. So I called my credit union I had another loan with and did my HELOC while paying no money on fees. The actual property was financed through a commercial loan with a lender I work with.

How did you add value to the deal?

I didn't use an agent, I dealt straight with the seller who was the listing agent. This was extremely helpful in a lot of ways to both of us.

What was the outcome?

I have updated one of the units, raised rents on two and trying to lease the last unit so it will be at full capacity. Once the other two units leases are up, I will raise the rent and/or renovate those as well.

Lessons learned? Challenges?

This unit is primarily section 8 so I am learning how slow they operate. This property is also managed by a property manger. I never realized how much you have to pay attention and audit their work and constantly follow up and stay engaged.

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

I worked with Michelle Barone who is an investor herself. She is in the Claremore/ Tulsa, OK area. She's very honest and very responsive. I got my loan with Blue Sky Bank in Oklahoma who is a commercial focused bank and I have worked there for 5 years if you have any questions.