6 Unit Multi-Family

[Timothy Allen Kidd]

Investment Info:

Large multi-family (5+ units) buy & hold investment in Louisa.

Purchase price: $450,000
Cash invested: $57,510

Purchased a property with a quad and a duplex located on the same property. The deal was an off market deal that I found through one of my realtors. I was able to negotiate owner financing for the deal with the owner at 6% with a 30 year amortization on the loan and a 3 year balloon. I had to bring 50,000 down payment plus closing cost. All 6 units were rented and I keep the current property manger in place.

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

Me and my brother had been looking at all different types of deals and we just keep coming back to multi family being the best way to go for cash flowing properties. You get so much more for all the work. One financier, one inspection, one closing, and 6 units!!

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

I found it by networking with multiple realtors. I shared what I was looking for and my realtor brought me the deal once she had found it. It was totally off market and the owner was negotiating selling it to someone else. I went and met with him. Share my business plan and background and then convinced him I was the better option for selling his property.

How did you finance this deal?

I utilized owner financing on this deal

How did you add value to the deal?

I was able to add value to the deal by increasing the rents and improving the property cosmetically after purchase. I personally brought value to the deal by finding it and putting it together with the owner my brother and the realtor. I arranged and communicated everything and insured it went to closing successfully.

What was the outcome?

We closed on the deal and are currently renewing the leases and fixing some minor issues with the property.

Lessons learned? Challenges?

Closing cost were a surprise. Taxes even on an owner financed deal hurt a bit. Negotiatin price in owner finance off market deal was not easy. He held all of the cards. Did get him to cover the commission for my realtor. 9,000 plus only 11% DP.

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

Yes I had a realtor. That was really it on this deal except for a inspector and closing agent. My realtor was awesome.