South Gate 4plex I purchased with FHA loan!

[Patty Gonzalez]

Investment Info:

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

Purchase price: $230,000
Cash invested: $7,000

This was my first investment property. I bought it as an FHA loan which required only 3% down payment. I've invested more over the years maintaining the property but the down payment was just $7000.

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

My father owned properties and in my 30's, I started remembering some of his smart investment moves and I began reading up on rental property investing and just pursued jumping in till I found the right property. It took me a year to find it.

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

I was scouring all listings to find an income property. I felt very confident with the $7K I had tucked away to buy a property. I called on a property I located in a real estate magazine. The realtor who took the call informed me the property I was calling on had sold but he had a property that had fallen out of escrow. I went to see it and made an offer. When it came time to close I only had a total of $7K; $3K short so the realtor threw in a portion of commission to close;he represented all

How did you finance this deal?

I took out an FHA loan which only required a 3% down. FHA requires owner occupancy so I kept one unit vacant for about 6 months. I did have to pay mortgage insurance but I still had positive cash flow.

How did you add value to the deal?

When I purchased the property, one tenant move out. I renovated the unit by painting and changing a toilet. When a second unit vacated I renovated it with $1800 painting it all white, replacing kitchen cabinets, new carpet and a ceiling fan and rented it for $1000 from $750. It rented right away.