There are deals on the MLS

[Hans Christopher Struzyna]

Investment Info:

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

Purchase price: $245,000
Cash invested: $105,000

Contributors:
Kristin Hedstrom

My fiance Kristin and I got our long term buy and hold game started last summer. We bought a duplex in Tacoma, WA and have now managed two renovations from CA. It has been a wild ride but we are sure glad we did it.

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

Long term appreciation and cash flow from day 1.

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

It was sitting on the MLS for over 9 months. We ran it through our spreadsheet and the numbers worked. We ended up running over 35 properties through before we got to this one.

How did you finance this deal?

25% down 30 year fixed mortgage.

How did you add value to the deal?

We started off with one vacant unit and one occupied. We fixed up the vacant one with new flooring, paint, lights, heaters, countertops and a few appliances. Then we got a renter paying close to fair market rent. We didn't do a full reno because we were short on cash so we are likely leaving a few bucks behind on rent. Then our 2nd unit became vacant at the end of January and we did a full reno on that unit - kitchen, bathroom, floor, paint, lights, etc.

What was the outcome?

We are just now finishing up the reno on the 2nd unit and will have it leased shortly. It will start to cash flow really well once we do that. $200+ per door.

Lessons learned? Challenges?

Our main challenge was around the property manager we used. Their communication is low and their solution to almost everything is to spend money. As well, the tenant we inherited asked for 30 more days to move out 36 hours before their moveout time and after they had been given proper notice. We ended up negotiating a "cash for keys" deal which in the end was much cheaper than an eviction attorney.

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

Aaron Nelson at White Coat Reality helped us buy it. We have referred a few others to him. He did a great job for us.