Deal #1 - Duplex in Norwich

[James O'Connor]

Investment Info:

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

Purchase price: $179,000
Cash invested: $7,000

First Property done and in the books. House hacking a duplex. Should cash flow nicely once I move out and both sides are rented.

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

Financial freedom. Brandon Turner explained house hacking as an easy entry into the real estate world. I had very little cash and this seemed like the best way to get started.

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

I had a real estate agent showing me 5-10 properties every weekend for a long long time. Had little cash to put into any deal so was always looking for seller credits / seller financing / and above all else the numbers had to work and cash flow. It took a long time until I found a house at the right price and right condition with the seller offering to pay some closing costs.

How did you finance this deal?

This was a standard FHA loan with 3.5% down.

How did you add value to the deal?

I haven't really added much value yet. The house is 6 years old and nothing is in bad condition yet. I did get a tree removed that was growing over the house and causing mildew to grow. Power washed the house. Painted the empty apartment. Bought new washer and dryer units and a new fridge as the existing ones were broken.

What was the outcome?

I live in one side. I have a tenant in the other side. The mortgage is $1378 the tenant pays $1567. Once I move out and rent the other side the property should cash flow.

Lessons learned? Challenges?

It's not as scary as it seems.

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

The real estate agent I used is no longer an agent, he switched careers. The mortgage broker I used was Dana at supreme lending. mention I sent you =]

[Tom Makinen]

Wait you found a 6 years old house in Norwich?  Everything I see is old and ugly