Our REAL first investment: Chehalis Duplex

[David Stone]

Investment Info:

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

Purchase price: $165,000
Cash invested: $1,000
Sale price: $208,000

2 bed 1 bath duplex in South Chehalis, WA

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

We were desperate to invest in real estate and found a deal where we could obtain owner financing.

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

We found this deal on CraigsList. We offered owner financing. The owner wanted 20% down and we told him we had 5k. He accepted after meeting us in person (and liking us!) We cash-advanced a credit card to fund the down payment and had no idea how we would pay the 5 year balloon payment. (We basically had 5 years to figure it out). The only thing we negotiated was interest rate from 5% to 4.5%.

How did you finance this deal?

Owner finaning. Check out my blog for more details on this deal!

How did you add value to the deal?

We really didn't do much to this property. The only major fixes were replacing a failed water heater in one unit and unclogging/replacing 5' of plumbing line in another.

What was the outcome?

We sold the property after ~4 years for a profit of $43,000 (with no cash out of pocket)

Lessons learned? Challenges?

This got us excited about creative financing and the power of real estate / passive income!

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

We bought FSBO without an agent. An attorney drafted the owner financing contract.