My first small multi-family

[Allyssa McCleery]

Investment Info:

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

Purchase price: $142,000
Cash invested: $51,500

This is a 4 unit property in a C class neighborhood that was in need of moderate repair.

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

I saw this property come up on the MLS and seemed to have great cashflow potential based on the market rent and the list price. I am interested in scaling up my unit count as quickly as possible. I also liked that the property is close to the highway and reasonably close to Ohio State Campus.

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

This was found on the MLS and was under contract after the second counteroffer was submitted.

How did you finance this deal?

This was my first deal using conventional financing so I had to put down 25% of the purchase price to secure the deal.

How did you add value to the deal?

Many repairs were made and continue to be made to the property as units become available. Some repairs include replacing the water tank, fixing plumbing issues, fixing central A/C, replacing flooring, adding washer/dryer hook ups, painting, upgrading bathrooms, repairing bedroom doors, upgrading kitchens, landscaping and driveway repairs, repairing roof and gutters and installing deduct meters on all waters mains to bill back tenants for water.

What was the outcome?

This property has been tricky so far because of multiple evictions in part because of inheriting tenants from the seller as well as placing a careless property manager initially. A new property manager has been placed and the irresponsible tenants are slowly being replaced with responsible, paying tenants. I expect the property to be stabilized within the next 6 months.

Lessons learned? Challenges?

One lesson I learned is to account for higher vacancy in my initial analysis and to take steps toward eviction as soon as payment becomes an issue. I also learned that I must be slow to hire and quick to fire when I see things are not working out.

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

Tucker Long (realtor)
Mina Akladious (mortgage broker)
John McCoy LandSel Title Agency