First of all, thanks to the BP community for your help along the way prior to, during, and after purchasing my first investment property (a buy and hold 4 plex). And special thanks to @Joshua Dorkin ,@Brandon Turner and all the awesome guests on the BP Podcast - it's one of the most informative and entertaining podcasts I've ever heard! Thank you for the guidance.

It was a wild ride, with A LOT of unexpected bumps along the way (no matter how much reading and research I did ahead of time). But now that everything has settled down - rehab is done, completely turned over the old tenants and have it fully rented - I'm excited to build systems for my r/e business and for the next deal!

Anyway, here's the stats:

Purchase Price - $180k

1978 build. 4 units - all 2/2s. Class C/C+ neighborhood within walking distance from a major university.

Seller paid 2% of closing costs.

New roof in '13, new windows throughout building, new staircase, 3 of the 4 units had been completely renovated. The remaining unit needed a total rehab (sands ripping out the walls, plumbing and electric replacement).

When I put it under contract, the units were not renting out to students, it was quasi section 8/lower income. The seller was clearly just putting people in it to advertise the property as fully leased although it's in a student area. Rents when I purchased were $650, $750, $600 (non-renovated unit) and $650 (totaling $2,650/mo).

Shortly after putting it under contract through my first month of ownership, the tenants (who were mostly on month-to-month leases) all fled like rats, which was good because the rents were under market (I could prob get a max of $750/unit) and the tenants were less than ideal.

Back to the numbers....

Conventional Loan 25% Down: $45k Amount financed: $135k @ 4.75% 30 years - $706/mo

Total Renovations:$16k (I'd say $10-$13k was related to the one unit's rehab - new flooring, new a/c, new fridge, new kitchen cabinets, new toilets, new water heater, painting, new washer/dryer, replacing back door, refinishing tile in baths. Advice to newbies: Make sure you factor in contingencies - Whatever you think the rehab will be, I'd add prob another 10%-25% contingency on top of that to be safe.

I prob paid $1k-$1.5k in "stupid tax" related to hiring a bad handyman and having to re-do his work. However, we found a lot of great, trustworthy vendors that we'll leverage in the future.

NOI:

New/Current Rents: $2,921/mo After the rehab and a complete tenant turnover, my monthly rents are now $729, $744, $739, $709. The one renting for only $709 is prob the max at this point as it's the only unit w/o a w/d inside. Next year, I can prob increase the rent on the other units between $10-$20/month.

Vacancy: -$146/mo (5%) These are now mostly student rentals where I require their parents co-sign.

Property Mgmt: -$0/mo - I'm managing it myself based on the sage advice I've gotten from BP. I also live 10 mins away. Although I ran the #s to factor in PM so one day I can hand it over to one.

Maintenance: -$250/mo (9%)- Threw up a 9% reserve for maintenance. While rehabbing, I spent a little extra money fixing things that could potentially cause problems down the line.

Cap Ex Reserve: -$438/mo (15%) - Again, I'm prob being a little conservative here as most of the major components (roof, a/c) are all about 2-3 years old, and all four units were recently renovated. Putting a lot away as there's some trees I want removed, and possibly installing a w/d in the one unit that doesn't have it (doesn't currently have hook-ups). I'll drop my Cap Ex Reserve % down to around 10% next year once I've built up a nice reserve.

Utilities: -$180/mo - I pay water/sewage for the building which comes to around $150/mo. Garbage is the other $30. I may sub-meter these costs back to the tenants in the future.

Lawn: -$0 - There really isn't much of a lawn to speak of. It's really all driveway and some trees. I come by every couple of weeks and spend 15 mins weed wacking and leaf blowing - I use it as a chance to just check in on the property. Someone quoted me $150/mo to do this...OK!

Property Taxes: -$245/mo

Insurance: -$131/mo

Monthly NOI: $1,531

Debt Service: -$706

Cash Flow Monthly/Annually: $825 / $9,899

Cash-on-cash return: 16%

Cash flow per unit: $206

Next year, after increasing rents to $2,946/month and bringing my CAP Ex reserve down from 15% to 10%, I'm looking at the following:

Monthly NOI: $1,698

Debt Service: -$706

Cash Flow Monthly/Annually: $992 / $11,906

Cash-on-cash return: 19%

Cash flow per unit: $248

Also, based on comps and increasing the NOI, I estimate I also netted approximately $20k-$25k in forced appreciation as a result of the renovation and rent increases.

Thanks again BP!!

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