First duplex rental property in the bag!!

[Kenny Nevarez]

Investment Info:

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

Purchase price: $233,000
Cash invested: $46,000

First rental property as a cashflowing duplex. Went from looking for 3-4plexes in the downtown chicago area to the much more affordable and landlord friendly Rockford area which made all the difference.
233k purchase price, 20% down, $1547 on monthly Mortage+Tax+Insurance
unit 1 rent at $1550 and unit 2 at $1350.

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

Multifamily allowed us to scale better and would have originally made a great house hack but it worked beautifully as a full time rental.

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

At first we were looking at downtown chicago multifamily units but realized that the entry point was too high for comfort. We changed up our search criteria and realized that Rockford is much more affordable and can cashflow well with the right Deal. The seller was also very skeptical of our lender and asked us to consider a local bank. We obliged and ended up finding a great local lender thanks to this.

How did you finance this deal?

Traditional conventional loan at 20% down, after all fees we were at about $50K in on the deal.

How did you add value to the deal?

We Honestly got really lucky on this deal. It was a beautiful home in a good area of a more affordable city. The seller could have started a bidding war with multiple offers but we happened to connect with her due to her situation and her love for cats. Sharing pictures and stories of ours helped her feel more comfortable with us and ended up being the deciding factor!

What was the outcome?

1 unit pays for mortgage, taxes and insurance. Second unit adds $1350 monthly with technical cash flow of about $800 but we leave all the money in the deal as we don't need it right now. Down the line we can pull from this stash to fund the next deal.

Lessons learned? Challenges?

Screening tenants was quite the experience as some of the nearby neighborhoods can have some shady characters. Learned the importance of properly screening tenants which helped us avoid issues down the line.

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

Our real estate agent Araceli Ortiz was amazing. She is very organized and was on the ball for all the dates and time frames. Highly recommend her if you are in the Rockford Area.