2 Duplex's Acquired same Month

[Enrique Hernandez]

Investment Info:

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

Purchase price: $162,500
Cash invested: $75,000

I was offered this property directly before it went on the market from my agent. Had the proceeds from my previous sold property. Ended up partnering with my parents 50/50 and actually was able to buy two properties the same month. A duplex where I live and the duplex that was offered to me.

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

More doors more cashflow. Much more sustainable than a single family

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

I was offered this property directly before it went on the market from my agent. She said the owners wanted to owner finance to avoid dealing with tenants. Property went on the market that week as we began negotiating terms. Ended up picking up the property for $162,500 from a listing price of $175,000. Owner offered financing if we put down $50k. Got a 5% rate calculated for 20 years with a balloon payment in 5 years (2026). We rented the property for $2000/mn and had a private mortgage of $743

How did you finance this deal?

Used owner financing

How did you add value to the deal?

Fully renovated both homes. Installed new roofs to both. updated the kitchen and bathrooms. New flooring throughout, new paint in and out. Cleaned up some tall trees

What was the outcome?

We are going on to 4 years of when we purchased it and have it now on the market. If we don't get what we would like we will refinance it and upgrade into the 10 door plus multifam network deals.

Lessons learned? Challenges?

Partnering up with family that has trust in our track record boosts confidence and allows for continued business. Biggest lesson would be to have refinanced when interest rates were low and locked in a fixed rate for longer terms without a balloon payment! Even if we got a higher rate then it would have still worked out not having a balloon payment next year. The challenges in this deal are minimal now that the property is vacant for sale. We pay the mortgage not the tenants!

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

Yes absolutely. We have continued to work with Teresa Fernandez the local go to real estate agent in Coalinga CA. Better to have one agent knowing I am an investor and handyman. She has recommended me to many others.