First Multi Family Rental (4-plex)

[Matthew Pritchett]

Investment Info:

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

Purchase price: $78,000
Cash invested: $22,500

Seller said he was tired of the work to maintain the property and work with tenants, had the property over 20 years. Tenants were paying $200-300/month while market rent was $600/month. The property was good but needed better management and updates.

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

Four rents from one deal is great: rent still incoming when not fully occupied, can rotate tenants from unit to unit for updates, and more people to report if there are problems with the property.

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

Local real estate agent (Suzie Mack) was on the look out for me. She's a great person with a big heart happy to help me find a deal! Plus she grew up in the area and knows everyone that owns property in the area.

How did you finance this deal?

Bank Loan from Dave Wilson.

How did you add value to the deal?

Rents were sub market, upgraded units and raised rents as tenants rotated out.

What was the outcome?

Four good tenants paying market rent on time!

Lessons learned? Challenges?

We self manage and allowed a tenant to go delinquent without notice, ended up losing 3 months of rent. We now serve notice once the late fee period begins.

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

Suzie Mack Real Estate Agent for Tucker in Marion, Indiana. Dave Wilson, local loan agent/lender.