First Cash flowing property

[Craig Parsons]

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $258,000
Cash invested: $26,712

Mixed use Residential/Commercial Building

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

Looked like it would cash flow and have further upside potential

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

Well I was in the store of a gentleman and I mentioned to him that if he knew of any real estate that I may be interested in to let me know. The next day he told me of this place. He proposed it to me as a great potential STR and I agreed but also figured I would rather get started with a long term rental as there would be less moving parts. Eventually he helped me broker an owner finance deal with the previous owner.

How did you finance this deal?

Seller financing and private money for down payment

How did you add value to the deal?

The 5 apartment units were at least $200.00 under market and the downstairs commercial unit was completely unoccupied. Since then we remodeled 3 of 5 apartments raising the rent by an average $233/ unit on the renovated ones and $100 per unit on the non renovated ones. We also got a tenant for 1/3 of the commercial space which adds another $750 per month. Still have plans to renovate the last 2 units as well as change the remaining downstairs commercial to residential.

What was the outcome?

So far so good it cashflows a little over $1400 / month

Lessons learned? Challenges?

This was a bit of a rude awakening for me. i had planed to do all the renovations myself but even though I was the owner I was not allowed to do plumbing or electrical as it is a "Commercial Building" and they needed licensed contractors for those two parts. This kind of blew up my budget and time schedule.