First multi family 3 unit

[Alan Huang]

Investment Info:

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

Purchase price: $127,500
Cash invested: $12,000

3 unit Multi Family Brick building. Painted the entire place and replaced floor 1 furnace in 2021. Also did some work in Floor 2 updated kitchen, paint through out and added laundry machine and dryer. Now has been converted to 3 bed 1 bath and rented out by individual room with share common space.

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

Moving out to live on my own. Found this one where I can live for free and still earn some money.

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

Looked on zillow. Was on sale for 130k and I offered 110k. Met in the middle for 120k and seller finance 7500 for total pruchase price 127,500

How did you finance this deal?

FHA 3.5% down

How did you add value to the deal?

Cleaned it up and updated it. Added brighter lights and fresh paint.

What was the outcome?

Amazing Cash flow. First rented it out at market rents around 800, then post COVID 19 rents gone up to 1000-1200 for 2 bed 1 bath in the area.

Lessons learned? Challenges?

Had a tenant that is wanting to move in right away. Took the money and also gave them the key 1 day before move in date. They trashed the place and was so noisy that the basement tenant retaliated with a gun. That resulted in the police/SWAT team coming to clear the house and arrest the basement tenant. They trashed the place with dog feces. I ended up doing a Cash for Key to get them out.The lesson learned is that when a deal is super good, it also comes with its heavy management workload.