First property is cashflowing nicely

[Jeffrey Bland]

Investment Info:

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

Purchase price: $185,000
Cash invested: $75,000

Duplex that was in need of a couple of big items but mostly just a facelift and new appliances. I probably invested too much cash because I did conventional financing with 25% down but this was my first investment property and I bought it because I knew it would cashflow nicely. Monthly cashflow shown is after all expenses, including property management, future expenses, and vacancy. Each side rents for $1100*2= $2200 and PITI is $1105.

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

Two rents and cashflow made me jump into this one. I also wanted to get started somewhere.

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

I actually found this deal on MLS, believe it or not, and negotiated down from my $205,00 offer during the option period.

How did you finance this deal?

conventional financing
25% down
used money from a whole-life insurance policy

How did you add value to the deal?

We ripped out all of the carpet and had the concrete stained/polished and then painted the interior and exterior. We replaced one side with new HVAC and replaced all appliances. We updated the plumbing issues and added screens to all windows.

What was the outcome?

So far, so good. I am hoping to hold onto the property for a while anyway.

Lessons learned? Challenges?

When you are estimating costs of rehab it is better to overestimate costs.

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

Sure...
David Coker, local RE Agent (Ft Worth)
Worthington National Bank