Duplex - Franklin IN

[Ryan Taylor]

Investment Info:

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

Purchase price: $192,000

Duplex with 2-bed, 1-bath on each side.

Wife and I live in one half and we rent the other half to an excellent tenant.

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

I had been previously renting one unit of the duplex. During this time, my fiance and I started looking to purchase a SFH for ourselves. I talked openly about our plans to buy with my landlord who asked me if I would ever be interested in buying the duplex from him. After a few SFH deals gone bad, this duplex idea started looking better and better. So, with a small amount of investigation, and some persuading of my fiance, we jumped in and bought the duplex.

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

Just normal conversation with my landlord. I guess he wasn't making the money he'd hoped to and wanted to get rid of the duplex. Naively, I looked at the assessed value, took a few thousand off of that, and offered $192k to buy it.

How did you finance this deal?

Owner-occupied financing - 30yr fixed at 4% (20% down payment)

How did you add value to the deal?

No value added. Duplex was only 3 years old and in excellent condition when I purchased.

What was the outcome?

The outcome has been excellent! My neighbor, the other tenant of the duplex, remained and now rents from my wife and I. His rent covers most of the PITI and my wife and I cover the rest (+ extra for Maint, Vacancy, and Capex). All in all, my rent of $850/mo decreased to $550 after taking ownership considering the rental income from our tenant.

Lessons learned? Challenges?

House hacking is a real and beautiful thing! I'm doing it with a new build duplex that I paid full market price for. Every deal doesn't have to be a "wedge" or a BRRRR type deal where sweat equity is involved.

Lesson learned: I probably could've negotiated down the price - seeing as my landlord didn't counter my offer at all. He must've been surprised I threw out the number i did. Oh well. Next time!

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

No RE professionals for this one. Just a deal that my landlord and I put together ourselves... Actually, that's not true. I worked with Travis Shephard who is a Franklin based home inspector and contractor. He's been our guy for inspections ever since this deal in 2017.