3-family buy, rehab, and hold in rural PA

[Benjamin Burket]

Investment Info:

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

Purchase price: $48,000
Cash invested: $15,000

Contributors:
Christa Burket

3-unit property where all units needed updating. Was generating $250 per month in rent (yes, that's right). Renovated on weekends with my wife and my brother and got all 3 units rented. Monthly income is now $1,850 with very low costs. Great cash flow but tough area to find good tenants.

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

This was my first deal, and I always liked the idea of owning rental properties. My brother and I split the deal to share the risk and responsibility. We also wanted to help my father out since he was not exactly cut out for being a landlord.

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

My father owned the property.

How did you finance this deal?

Owner finance.

How did you add value to the deal?

Full cosmetic rehab on 2 out of the 3 units, which were vacant. Raised rent on the 3rd unit.

What was the outcome?

We now have all 3 units rented with amazing cash flow. It is difficult to find good tenants in the area, and collecting rent can sometimes be difficult. That being said, we have not had any "major" issues.

Lessons learned? Challenges?

I wish we would have just paid contractors to do the rehab, but at least I was able to get the hands on experience. It took us around 8 months to complete the rehab because we were traveling on weekends to the property. With the rental income we lost during that time, we could have easily paid a good contractor and kept our sanity :)

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

No, just ourselves!