First deal to get me going

[Corey Louton]

Investment Info:

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

Purchase price: $40,000
Cash invested: $18,000

Duplex that required a moderate renovation.

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

It was multi family, in my price range, and I needed to move past the analysis paralysis.

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

Found it on Zillow, offered $50k and was accepted. After property inspections were completed I negotiated the price down to $40k due to required repairs.

How did you finance this deal?

Used private money to make the purchase; taking a loan of $50k amortized over 30 years @ 5% with the note due at 5 years.

How did you add value to the deal?

Leveled the downstairs kitchen, replaced all cabinets and countertops, painted both units.

What was the outcome?

Both units are currently rented with positive cash flow. My property manager has been a huge help in my success so far.

Lessons learned? Challenges?

Lots....what is required vs what would be nice when you’re on a budget is huge. Listen to your team when making renovations.

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

Lakesha Kirkendall with Desirable Management, LLC in the Norfolk area is fantastic. She knows the market and has a large network of professionals.

[Corey Louton]

Thank you. First off, this is a low income housing area and my first experience in this market. I leaned heavily on my property manager when it came to marketing the property (I interviewed 4 or 5 before finding her). I ended up spending a pretty penny on plaster work for the downstairs when drywall and paint would have been just fine; this cost me an extra $2200 or so (this is where my contractor and realtor recommended the plaster and my prop mngr didn’t). 

Numbers:

Asking $57k -> purchase $40k

$18k in repairs 

Rent: $700/$650 ($1350 total)

3%vacancy 10%prop management 5% capex & repairs 

Property taxes $69.08 / Insurance $135

Cash flow $435

Planning to BRRRR this property in order to scale