2 unit property in Lubbock

[Josh Guild]

Investment Info:

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

Purchase price: $45,000
Cash invested: $20,000

Two unit property I purchased as a package with a 3/3 across the street in 2017. Sold the 3/3 but still own this property. Currently rents for $950 for the front unit and $675 for the rear unit. Purchased this 2 unit property and the 3/3 for $90,000. Property had a decent amount of deferred maintenance. Put a new roof on, updated plumbing, minor remodel in bathroom/kitchens, new paint interior and exterior, and refinished existing hardwoods.

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

I had just finished my first single family property and got a tenant in place and was looking for an off market deal which this was. The property was close to the university and I thought I could get college students paying a premium rent.

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

Driving around near my house and near the university in Lubbock saw a for sale by owner sign and talked to the owner who ended up showing me a few properties she was willing to get rid of. For both properties (3 units) she wanted $120,000. We ended up settling on $90,000

How did you finance this deal?

Cash

How did you add value to the deal?

Through repairs and vacancy.

What was the outcome?

Profitable property with good returns. Ended up shifting my tenant focus from college students to a more wide audience. Had a few issues with tenant quality due to inexperience in real estate and land lording which resulted in good lessons learned. Have current front house tenant in place for three years.

Lessons learned? Challenges?

I underestimated how rough the neighborhood was and the challenges that would create during the remodel. Had issues with squatters and thieves including all copper water pipes stolen. Learned a lot about the remodel process and costs associated with an array of repairs. I learned college kids were higher maintenance tenants than I wanted as well as the importance of picking good tenants in general.