Duplex originally bought as a primary residence, and now producing great cash flow

[Brooks Gagnon]

Investment Info:

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

Purchase price: $133,000
Cash invested: $4,655

Up and down duplex in a quiet neighborhood. Was owner occupied for the first 5 years. Current market value around $280,000

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

The ability to live essentially mortgage free while still owning my home, plus the ability to later rent both units, which now pay for the mortgage on my single family home.

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

This one was found off market. A friends sister owned it and mentioned she was thinking of selling. So I contacted her, went to see the property, and found out that she was hoping for around $150k. We got a home inspection done, and came back to her with what we would be comfortable paying considering the needed repairs ($133k). She agreed and we moved to finding financing.

How did you finance this deal?

This is actually the only property I ever purchased with a traditional FHA mortgage.

How did you add value to the deal?

While living in the unit, I did a full renovation starting with the kitchen.

What was the outcome?

This has turned into a great cashflowing property that is paying for the mortgage on my current home. Also, we have seen a great equity build, currently around $170k.