Owner Occupied Investment

[Caitlyn Howe]

Investment Info:

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

Purchase price: $182,000
Cash invested: $62,000

Two unit property Unit 1 is a 4/2, Unit 2 is a studio with 1 bath. Purchased this property as a live in investment. We occupy the main space and rent out the attached studio space.

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

The option to make money where you live was ideal for us.

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

As soon as we found out this had rental income associated, we knew it was the right deal for us. The rental income covers the majority of the mortgage, and in time we plan to rent out the main space to increase cash flow, as we find another multi-family home to invest in.

We negotiated more as an owner occupant and less as an investor, because we were going to occupy the space. We ensured certain items were fixed, or received credit for future repairs, knocked $10K off asking.

How did you finance this deal?

As owner occupants we used a standard mortgage opting to put 33% down to have immediate equity, and lower monthly payment.

How did you add value to the deal?

Negotiating the price down on the initial investment. The sellers were clearly motivated and were wary of FHA loans, being able to do conventional financing eliminating PMI and offering flexible closing date reassured the owners and they jumped at our offer.

What was the outcome?

Still own and occupy the property, slowly adding value through renovations and upgrades including whole A/C upgrade, roofing repairs, and landscaping.

Lessons learned? Challenges?

After living in the space it became clear the layout is suboptimal, it's clear we will need to do some significant updates to improve the flow prior to reselling.

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

I used the company my mother works for. MiaLinda realty, both Linda and Miriam are knowledgeable and treated me like family since my mother works in a different part of the state. I am sure they treat every client with the same thoughtful care.