Dekalb Duplex Investment

[Pat Lulewicz]

Investment Info:

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

Purchase price: $85,000
Cash invested: $21,250

Duplex located in Dekalb, IL. Second purchase made (1 month after purchasing first rental) with 100% occupancy. Wonderful long-term tenants and the property was in great shape given the age and amount of individuals residing in it.

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

A duplex at this cost was a wonderful cash flow opportunity. Already occupied so didn't have to advertise. Simply purchase, introduce myself to tenants, and collect rent.

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

MLS - minimum price negotiation.

How did you finance this deal?

Given that it was a single-family, there were no issues with getting conventional loan financing on it, through a mortgage originator.

How did you add value to the deal?

Self-managed to maximize cash flow. Replaced a heater prior to winter given its age. 1 tenant mowed the lawn for minimal rent reduction, so purchased him a new lawnmower to replace his old one.

What was the outcome?

Wonderful 20%+ returns annualized. We will have to replace windows on the first floor in the current year which will eat into profits, however annualized, the returns will still be strong, and all tenants are happy.

Lessons learned? Challenges?

With old homes, set aside money for CapEx and fit it before you need to. Once something starts giving you problems, take care of it before it rears its ugly head!

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

Bob Ashbrook - Inspector - incredibly thorough - western suburbs of Chicago and into North-Central IL