First Investment. Duplex in Spokane

[Justin L.]

Investment Info:

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

Purchase price: $83,500
Cash invested: $29,500

This is my first investment. It's located in a less desirable area but close to a popular up and coming part of town. It's a 1898 built converted duplex I bought right off the MLS. The key/challenge to keeping this investment doing well has been finding good tenants that want to live in this area.

Currently I self manage, as I wanted to learn everything I could about REI. In the future I will probably off load this property via 1031 or at the least turn it over to property management. Over two years later and I'm really happy with the investment as a whole. Taking care of any maintenance and managing it myself has allowed me to squeeze a lot of cash flow out of it.

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

I've always been attracted to multi-family. It was pretty cheap and didn't need much work to get it rent ready.

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

On MLS. There wasn't much room for negotiation. Someone else had it under contract the first day and my realtor was able to get us first in line if something fell through. Luckily it did!

How did you finance this deal?

Conventional loan at 4.9%. I would like to cash out refi, but the rates have gone up so much it's hard to justify it.

How did you add value to the deal?

I spruced it up and fixed basic things that would make it more appealing to more renters. The best value add was to include washer and dryers with the units. They already had hook up in both units. I think that in this price range renters don't usually own them and it is an easy and cheap amenity to add. I was under $350 for both sets I got used on Craigslist. Luckily I haven't had a single problem with them.

What was the outcome?

A great cash flowing investment and a ton a experience!

Lessons learned? Challenges?

I learned a lot about the buying process, minor rehabbing process, advertising process, leasing process, dealing with contractors, dealing with tenants, book keeping and tax advantages. I made relationships with realtors, brokers and other investors.

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

I worked with a few great people. They just aren't on BP yet.