2nd Real Estate Investment

[Account Closed]

Investment Info:

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

Purchase price: $320,000
Cash invested: $6,400

Pretty surprised to find this deal, this was a classic case of someone listing a property that needed work, no one wanted to buy, it sat long enough on the market that people stop paying attention while the owner slowly fixed up. When I found this property, it ended up being in the sweet spot. I lived in one unit and AirBnB the other in the summers (which completely covers the mortgage). No repairs needed, as licensed real estate agent I put my commissions towards the 5% down conventional for a 2% down and I caught this right before interest rates climbed at 3.3%. Also negotiated for the Seller to cover all the closings costs, slide into this with very little down. Great little rental property and a convenient location!

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

At a lower price, good cash flow potential, convenient location, AirBnB potential.

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

Self representing looking for duplexes, this property had been on the market long enough that I knew I had the negotiating power, Buyer would not have wanted to loose me as a Buyer. My goal was to secure the property with as little down as possible. I offered almost a full offer and asked for full closing costs, only asked for Health and Safety repairs in the Inspection report (nothing else was needed). Overall pretty reasonable deal and Seller.

How did you finance this deal?

CU1 has a 5% down conventional on duplex and triplexes

How did you add value to the deal?

Fully furnished and AirBnB / VRBO, since I was buying in the spring I actually had this listed as a short term rental before I even closed on the property to make sure I had a booked summer, I used the listing photos in the profile pics.

What was the outcome?

Fully booked AirBnB / VRBO last two summers!

Lessons learned? Challenges?

Don't cancel too many AirBnB reservations, don't rent to locals, don't let VRBO advertise through Expedia because none of those guests will be able to give you reviews (or you them). Most people are good, some people just like to complain.

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

I represented myself.