First Multifamily Deal

[Michael Henry]

Investment Info:

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

Purchase price: $78,000
Cash invested: $22,600

1930 2 unit duplex well taken care of move in ready. 

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

Wanted a low cost investment property that I could purchase using only equity from my first rental. Settled on a duplex to minimize risk, one side was already rented which covered 100% of the mortgage. 

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

I found this deal on the MLS, ran my numbers to come to get a 10% cash on cash return. Offered a price that would give me 18% return and negotiated from there.

How did you finance this deal?

This was conventional financing with 25% down. 5.5% interest 

How did you add value to the deal?

This property was turnkey, I was fortunate enough to find a seller that made all repairs at closing. (New stove , small plumbing repair , replaced a window that was broken)

What was the outcome?

When closing one unit was rented at $465, 3 days after closing received a prospective tenant application to rent second side for $495, a 6% increase from previous tenant. Walked in with $15k equity before my down payment, overall smooth easy process.