My First Investment Property

[Tammy Wheatley]

Investment Info:

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

Purchase price: $290,000
Cash invested: $60,000

Duplex. I live in one side, rent out the other. It is in a lovely, unincorporated area of town on an acre lot. Very unique for the area.

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

I have been considering Airbnb for some time. I got shy about putting it up as a STR and went with a conventional renter. I still consider STR (even for the side I am currently living in) in the future. Providing I find a place I want to live. I keep it fluid. Currently entertaining adding on to my side.

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

I found this property on MLS. It had been on MLS for over 45 day in fall of 2021. Both units were rented out. It was in decent shape, it is a straight forward pre-fab house of the 1970's. I came in with a low ball offer (they were asking 350k at listing, went down to 325k when I found it) . I offered 275k (no one was looking at the property; seller wanted to retire and motivated to sell). We went back/forth and landed at 290k

How did you finance this deal?

Conventional 30 yr, 20% down, 4.125%

How did you add value to the deal?

I remodeled kitchen and bath on side I'm living in. Enlarged walk through between kitchen/living room (it was standard doorway size). Painted both units. Replaced HVAC in rental.

What was the outcome?

I love the property - the area is quiet. The tenants are a dream and paying a fair rent. I could put my side on STR when I find someplace for me to live, but I might find another rental property instead as I am not finding what I want. I may add on to my side.

Lessons learned? Challenges?

This property is in an unincorporated part of the county, zoning had changed since the property was built. It was built as a duplex. However, county stated that if the dwelling was damaged more than 50%, then it would need to be rebuilt as a single family dwelling. My first lender gave a clear to close when he didn't have authorization due to that rebuild issue. Found this out day of 'closing'. That day I got a new lender on the phone with my attorney and we closed in 30 days from that day.

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

The agent I used I will never use again. She was flippant about the first lender bailing on me. That lender was part of her brokerage.
My second lender is the bomb!! I will always recommend her!