First Investment - Buy and Hold

[Matt Helpling]

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $320,000
Cash invested: $15,000

Property consists of 4 quadplexes (16 Units), 8 two bedroom units and 8 one bedroom units. When initially purchased, the property was in disrepair and had not been properly managed for 10+ years. Rents were well below market and substantial repairs were needed.

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

Researching and learning about multifamily investing and management through BiggerPockets.

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

Found out about this deal through an acquaintance. This was an off market deal that was completed without realtor involvement. I initially negotiated the terms of the deal through a Letter of Intent and then developed and executed a Purchase Agreement.

How did you finance this deal?

Negotiated $198,000 in seller financing through a Promissory Note, pulled a $99,000 commercial loan with a 5 year balloon, and contributed $33,000 as a down payment.

How did you add value to the deal?

I have renovated 13 of the 16 units to date and have raised rents closer to market rent.

What was the outcome?

This deal was a homerun. Just recently completed a cash out refinance to free up funds for my next investment.

Lessons learned? Challenges?

I learned that investing in real estate is not as difficult as most people make it out to be. It can be complicated at times, but breaking the overall process down in to smaller pieces and taking them on one at time definitely simplifies the process.