West Fargo 4 Plex, Erik's 3rd RE transaction

[Erik Stewart]

Investment Info:

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

Purchase price: $261,000
Cash invested: $9,135

This is a 1978 4 plex building in a nice West Fargo Neighborhood, with the Cheyenne River in the back yard. (3) 2 bedroom units and a 1 bedroom unit. All units are electric BB heat that the tenant pays. Owner pays common area water/electricity/gas.

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

My wife and I wanted to continue house hacking but with our own personal space. So we moved out of a house with roommates and into this 4 plex. Great area for a rental after we move out. This particular property had been updated with new steel siding, windows, facia/soffit/gutters/downspouts, doors, and a couple units.

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

I found this deal on Craigslist and negotiated directly with the seller. It was a group of investors who were breaking up and wanted to sell and also save on commission.

How did you finance this deal?

This deal was another FHA house hacking property.

How did you add value to the deal?

Not a value add property per se. I did lawn/snow while I lived there.

What was the outcome?

I am going to keep it as a long term rental. I don't have much capital invested into as the FHA allowed a low down payment.

Lessons learned? Challenges?

I learned how owning/managing a house vs a 4 plex has very different qualities and different Pros/Cons. SFR's are nice because you don't pay for Lawn/Snow and you only have to find 1 tenant per lease period however on the flip side, the multi's you have to pay for lawn/snow (and sometimes heat and water depending on the setup) and you have a little more vacancy protection having multiple units. If 1 is vacant, 3 others are still bringing in income, but it is 4x the work placing tenants.

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

I did work with and continue to work with many great professionals, PM me for details as needed.