Second Fourplex - 14 days after our first property.

[Robert Shedden]

Investment Info:

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

Purchase price: $240,000
Cash invested: $63,500

Contributors:
Tara Shedden

Self-managed fourplex; landlord pays water, sewer, trash, landscaping, snow removal.

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

This was the second property we purchased; closing just 14 days after our first property.

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

It was listed at $250,000 and the owners were selling another fourplex on the same street. We offered $240,000 each for both.

How did you finance this deal?

5-year loan with a balloon payment at 5.555%, 25% down.

How did you add value to the deal?

It was our first deal and has cashed-flowed since day one. It is also gave us experience with property management.

What was the outcome?

We are still cash-flowing and looking to scale our business.

Lessons learned? Challenges?

We attempted to renovate a vacant unit. But it took too long and cost too much. We would have been better off just renting as is and getting a bit less in rent. However, it was an invaluable learning experience. I would love to post that everything went awesome... but that wouldn't really benefit anybody.

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

We worked with the owner of Key Realty, John Murray on this deal. He was instrumental in getting us to jump into real estate investing.

[Robert Shedden]

Originally posted by @Nik Moushon:

I'll have to be another person wonder why in the world would you do a balloon payment on a small MF, especially on after 5 years. The interest rate isnt even good. On top of doing a 25% DP.

We went with a commercial loan from a local bank. The down payment was a gift from a family member and we purchased it using our LLC. This was our second purchase in our real estate investing journey. It is not a home run deal, but it did get us in the game. Now we are cash flowing, getting invaluable experience managing 8 units, and on the hunt for a BRRRR deal. If I had to do it again, I would have changed a few things... but at least I didn't suffer from analysis paralysis. I have spoken to a few local investors and they have congratulated me on jumping in. They know several other folks that have been talking about pulling the trigger for years, but have never actually went through with it...