Washington state buy and hold in Skagit Valley

[Sam Denny]

Investment Info:

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

Purchase price: $627,500
Cash invested: $6,000

Purchased newer 4 plex build in 2012 with higher end finishes with rents below market rates. Previous owner was self managing.

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

Building passive cash flow for the long term to replace income from regular job.

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

Found on zillow as for sale by owner. Used agent to negotiate purchase. Paid close to asking price

How did you finance this deal?

25% down. Used Caliber loans. Wasn't able to use my banking relationships at Bank of America since it was my first deal but would be able to now with better rates.

How did you add value to the deal?

I understood the current rents were well below market rates. Rents at purchase were in the 1200-1300 range and was able to increase to 1500-1600 without any major improvements.

What was the outcome?

I achieved close to 1% rent to price ratio post rent increases with very low maintenance and vacancy so far.

Lessons learned? Challenges?

I've been self managing so had to learn how to market and build leases. Not too difficult. Having a great maintenance guy has been key.

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

Yes! My agent Lawton Coursey.