First Buy & Hold - Triplex in Wilmington Ohio

[Adam Feick]

Investment Info:

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

Purchase price: $101,750
Cash invested: $31,000

Type: TriPlex
Units: 2 (2BR/1BA), 1 (1BR/1BA)
Current Rent Roll: $1400
Projected Rent Roll: $1500~$1600

Currently fully rented at $1400/mo. 1 long term tenant (7yrs), 2 other tenants are in 1st year lease.
- The 2BRs are at low end of market rent, however they are some of the nicer units that I have found. Rents can be raised $50~100 ea.
- The 1BR is at the high end of market rent at $450/mo.
Monthly cash flow should be $325~350 currently and $400~$425 with rent adjustments.

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

I have been looking at small multi-family properties for buy and hold strategy.
This is a well maintained, fully tenanted at below market rents, which gave it plenty of upside.

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

Found on the MLS.
Asking Price: $110,000
After initial walk through and estimating needed repairs made an initial offer of $103,000 which seller accepted.
Home inspector found some additional items for repair and we negotiated down to $101,750.

How did you finance this deal?

30% down payment with own money.
70% bank financed at 5.375%.

How did you add value to the deal?

Make needed repairs.
Raising rents up to market on the 2BR units.

What was the outcome?

Purchased and closed.

Lessons learned? Challenges?

This was my first investment property so I learned all the newbie items and had to work through the emotions of trying something new.
The seller accepted my first offer, so I should have been more aggressive in making a lower offer.
Talk to everyone you meet and ask for help. The sellers realtor provided a list of property management companies and was extremely helpful. I was able to generate a few leads from the property managers she suggested.