Our first try.

[Patrick McGeough]

Investment Info:

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

Purchase price: $68,000
Cash invested: $15,000

Small duplex in the middle of the city we live in. Mortgage payment is 400/month, rents for combined 1550/month for positive cash flow of about 1100.

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

Monthly passive income, tax savings from investing in real estate, tax write offs for owing rental properties.

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

Had some cash and wanted to make sure it started working for us. Saw the for sale sign on the property and called the agent. A couple of walk throughs and some serious discussions between my wife and I led us to deciding to make an offer. After a small bit of negotiating, offer was accepted and we were off to the races.

How did you finance this deal?

20% down and conventional loan through a local bank.

How did you add value to the deal?

Modest upgrades to both of the units including paint, light fixture updates, new heaters and door locks. Better property management services.

What was the outcome?

So far so good. Through 3 years we have had 100% occupancy on the upstairs unit and 80%ish occupancy in the basement unit for very nice monthly cash flow.

Lessons learned? Challenges?

Lots of lessons about financing and ROI, kind of a base level education on real estate in general.

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

Jace Connor at BankWest here in Mitchell South Dakota. We also worked with a great real estate agent here in Mitchell, but since I am an agent now, I will withhold that name.