Just sold my first investment property. Here's what I learned

[Tyler Edic]

Investment Info:

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

Purchase price: $93,500
Cash invested: $40,000
Sale price: $103,500

My first investment. Two family home in Oswego, NY. Timeline of events:

Apartment A
Owner-occupied with purchase - July 2013
Collecting rent from roommates
Owner moves out of house - June 2016
Tenants move in - October 2016
Tenants move out - February 2017
Renovation begins - March 2017
Renovation ends - July 2017
Tenants move in - September 2017
Tenants move out - September 2018
House is sold - October 2018

Apartment B
Tenant is inherited with purchase of home - July 2013
Tenant moves out - November 2013
Renovation begins - December 2013
Renovation ends - September 2016
Tenant moves in - September 2016
Tenant moves out - July 2018
House is sold - October 2018

What I did correctly:
- Bought a home rather than renting for 3+ years.
- Provided family and friends an affordable place to live for 5+ years.
- Acted as a fair landlord and learned the essentials.
- Bought a duplex & wrote off expenses related to rent-earning repairs made to home.
- Lived in half, rented the other half

What I would do differently:
- Target homes in a hot market before buying, guaranteeing appreciation
- Prioritize my renovation projects better to complete faster; removing unnecessary improvements (based on rent ROI)
- Target high-end tenants
- Don't pay utilities for tenants. EVER.
- Have more cash going into the deal in the case of unforeseen expensive repairs (cashflow)

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

I knew that I wanted to buy a duplex when I graduated from college so I could have tenants pay my mortgage, and roommates help with mortgage and utilities. I knew nothing about investing or home repair at the time.

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

I used a Realtor, who I was not particularly pleased with. I don't feel that she was acting in my best interest when I purchased this home.

How did you finance this deal?

FHA fixed 30-year mortgage

How did you add value to the deal?

Renovating apartment B while I lived in apartment A.
Renovating apartment A once I moved out and tenants moved into apartment B.

What was the outcome?

I think it's a wash financially but I learned a lot about home repair, finding deals and closing, selling homes, and being a landlord. It was my first home and first investment, so I did not do the diligent bookeeping I plan to do on future investments

Lessons learned? Challenges?

I would make only the necessary repairs to my next rental apartment, targeting high ROI improvements. I will also target higher-end tenants in the future, and digitize the entire landlord process. Additionally, I plan to invest in areas with greater demand so that my future investments appreciate more than my first home did. I learned a lot during this process.

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

Paragon Home Loans in Syracuse, NY