Multi Property purchase / hard money and seller financing

[Robert Clifford]

Investment Info:

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

Purchase price: $315,000
Cash invested: $50,000

Closed yesterday on 3 duplexes. Used a mix of hard money and seller financing to get it done. There's a good bit of deferred maintenance, but with a little rehab ($5k-8k) per unit, I'll be able to increase rents at least $100 a month for each unit. Seller has 2 more properties I hope to acquire next year. First step, transfer properties to new property manager, switch water billing to tenants, and make plans for electrical/HVAC and kitchen updates.

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

I couldn't afford the down payment to purchase all together, so by splitting up the transaction, I was able to acquire with minimal cash out of pocket, and included rehab in loan.

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

Deal found on MLS. They didn't sell last year, and I kept monitoring them.

How did you finance this deal?

Seller financing on 1, Hard Money on other 2 properties. 20% down on each of the two hard money loans, with rehab included.

How did you add value to the deal?

Adding HVAC, paint, and minor kitchen repairs.

Lessons learned? Challenges?

I made the offer prior to seeing the properties - preparing to buy long distance (we're 1.5 hrs away). In the middle of negotiation, I low balled the seller out of fear I was paying too much. We were then stalled for 3 weeks. I came back up and got it back on track. There's also a potential electrical challenge - breaker boxes that were recalled. Working on a plan with electrician to figure it out.

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

Heather Listar is a trooper. She's got experience working with investors, hard money lenders, and as a property manager. She always hustling to find deals and working for her clients.