First Property Restoration turned into a multi-unit rental $3600/mo

[Michael Garcia]

Investment Info:

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

Purchase price: $220,000
Cash invested: $8,000

Located in downtown Woodstock IL, this 2700 sqft 2-story historic home features craftsman woodwork, built-ins, and hardwood floors, with modern finishes. 5 bed 3 bath property with a huge yard, fire pit, and full unfinished basement partitioned and accessible to both side-by-side units. This property also has a detached two-car garage with a second story.

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

Everyone should own a multi-family home! Having my tenant pay the mortgage changed my life and shifted my mindset towards real estate and investments.

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

I found this deal via Zillow in 2021 when the market was HOT. It had terrible photos and looked like a ton of work...which it was, but I saw the potential. I negotiated down from $250k

How did you finance this deal?

I used a VA loan to finance my first deal.

How did you add value to the deal?

I added value by redesigning the kitchen and opened up the space by vaulting the ceiling, relocating the stairs, and knocking down some walls. By adding a shower and moving the sink in the first-floor bathroom, I created a more functional space. I also redid all the plumbing, electrical, and painted the entire place.

What was the outcome?

I learned an incredible amount of new skills AND I added around 120k In equity After Repair Value (ARV).

Lessons learned? Challenges?

You will almost always pay more than you initially planned. When you start opening up old houses you'll find problems that need to be addressed if you want to deliver a high-quality product to the end user. My goal is to find and fix everything that needs to be fixed before I have a tenant move in. This will save you headaches down the road. Always update old toilets! They are cheap and will save you from future leaks and clogs.