First Deal from 2017

[Nathan McBride]

Investment Info:

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

Purchase price: $200,000
Cash invested: $20,000

First deal. Went in with a partner 50/50 on down payment and ownership.

The house needed some work, but it looked mostly cosmetic. I was the first person to look at it and new I needed to act fast, so I made the jump. Learned about commercial lending in the process, as I found out this property would not qualify for conventional financing.

The appraisal came back for more than our contract price (like the real estate equivalent of an A+ on a test).

I still own this one and have used the equity to purchase other properties since.

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

MLS. The only property I have purchased on MLS.

How did you finance this deal?

Commercial loan

How did you add value to the deal?

Cosmetic updates/repairs and increasing rents to market

What was the outcome?

I still own this property and have used the equity to purchase another nearby property through a refinance/purchase transaction with the commercial bank.

Lessons learned? Challenges?

The property did not meet conventional financing requirements, so I was forced to purchase with a commercial loan.

Also, the property requires flood insurance, but I was able to get it surveyed and recieved a $2000/yr reduction in premiums.