First four unit

[Teresa Covert]

About two weeks ago I put in an offer on my first four unit. I offered 40,000 under asking price because from the street I could see the building needed a new roof. I also asked for 2000.00 in repairs and a contingency on inspection. Meaning I was afraid I was buying a lemon and was already looking for an out. The offer was accepted and I began to line up bids for the roof. Part of me was sick to my stomach believing that if the roof was that bad the inside would be worse. 

Today I met my realtor and inspector on the street but to my surprise I had looked at the wrong building when I did the drive by. My building, my beautiful building has a newer roof, new furnaces, new carpet, completely painted recently and about the only thing the inspector could find wrong was one of the hot water heaters need to be replaced which will be done with the 2000.00 in repairs. Just this week three more 4 units were listed in the same general area for 100,000.00 more then I paid for mine. I'm going to have some serious equity if they sale for even half that much more. 

To complete my story my realtor had called me last week and said two of the units were up for the leases being resigned and the management was asking if I wanted any input. I said yes I was going to have to raise the rent, (which was low for the area) to cover the roof and anything else that needed fixing. Both tenants were willing to pay more and the only empty apartment was signed at a higher rent beginning Oct. 1st just before I close at a higher rent. But I don't have to fix anything, so I'm over the top on how my first deal went and I'm getting a 17% cap rate according to the Bigger Pockets calc. 

So I went and looked at another four unit listed today and the sellers realtor was there. I walked around the building and introduced myself. He said I know you, you bought the 4 unit on Edmonds, I sold you that building. I said really, well you have this one priced too high, it won't cap out and you have some shingles missing on the back. He said your not pulling that on me again. I laughed and walked away. It was priced too high and there were some shingles missing on the back. Shout out to Bigger Pockets, I couldn't have done it without you.