The Property That Really Got the Ball Rolling

[Cory Wolff]

Investment Info:

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

Purchase price: $19,000
Cash invested: $21,000

Foreclosure property which was remodeled. Turned the second unit from a two bedroom to a three bedroom to increase monthly income.

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

It was $19k, but needed a lot of work. I knew that if we bought it and did the work ourselves that we would have a ton of equity to buy more.

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

It was a Fannie Mae property that was on the market for about 2 months. The funny thing about it is that the listing agent didn't have it on the correct MLS so no one local had any idea about it!

How did you finance this deal?

Our current home at the time had some equity. We did a cash out refinance on our home and used the cash to buy this property and fix it up.

What was the outcome?

Income generating property that pays my mortgage and is the property we used to get a line of credit so that we can buy/fix properties! It started it all for us!

Lessons learned? Challenges?

Scranton is an area with lots of older houses that were built using WHATEVER materials they could find at the time. Many of the homes were built by laborers, coal miners, railroad workers, etc. It's not uncommon to find different sized studs and headers. They literally used railroad ties and bars! I don't think I'd ever do too much structural stuff to another house in this area since it was a total headache. Replacing the drywall was a disaster!

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

My wife is an agent and I've been involved with real estate for years.