Conversion from SFR to 2-Flat

[Todd Kelly]

Investment Info:

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

Purchase price: $28,000
Cash invested: $38,000

We purchased this property in 1985 directly using owner financing. We paid interest only with a balloon payment due after 2 years. Then we totally gutted it, relying on our credit cards to finance the renovation. We covered the balloon payment by selling MCI stock, and getting an interim loan from the bank of Mom and Dad. Later, we got a 15-year Bank mortgage and cleared our other debts. It’s been paid-off over 20 years, is cash flow positive, and the market value increased substantially.