200 W 2nd St. Cheney WA two adjacent fourplexes

[Deepak Malhotra]

Investment Info:

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

Purchase price: $450,000
Cash invested: $90,000

These were two fourplexes that faced each other but were on separate tax lots. Basically an eight unit building but because they were on separate tax lots, two Fannie/Freddie conventional loans were possible. This meant better loan terms. They were 1950s base housing moved onto 1980s foundations/basement units.

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

The numbers worked.

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

On the MLS.

How did you finance this deal?

Two conventional loans.

How did you add value to the deal?

Minor renovations during ownership including new roofs, new windows, painting, new paint scheme outside, flooring.

What was the outcome?

Cash flowed well while I owned it.

Lessons learned? Challenges?

Financing is much better for 1-4 unit buildings than 4+ units. When you repair (as opposed to replace) things, you get better tax treatment. When you have a dumpster in an alley, non tenants will put things in it.

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

I was my own real estate agent.