From Agent to Manager to Owner to Resident Manager

[Will Fraser]

Investment Info:

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

Purchase price: $326,000
Cash invested: $11,410

A client came to me and offered me the penultimate opportunity: this quad. I had helped this client snag a killer deal semi-off-market 6 months before.

As happens in life, the tides turned and that client wanted to take their equity out and put it into a different vehicle, so he came to me, now the property manager, and sheepishly asked, "Will, would you hate me if I told you I wanted to sell it." "Hate you?!? I could kiss you!"

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

We wanted to pull levers that we could see as being incredible super-power types of levers. We were willing to live in a multi-family in order to set ourselves on a certain trajectory in investing.

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

I had brought this deal to an investor months earlier, they took it down and then decided to exit. I knew what it had appraised for previously, and had intimate knowledge of the condition through the inspections so I just made it a win-win deal.

How did you finance this deal?

low % down mortgage (FHA)

How did you add value to the deal?

3/4 of the units were occupied at purchase, so the vacant one we rehabbed the kitchen, painted the walls and trim, and added some light to the dark spaces.

What was the outcome?

Now we live in a stellar situation that is helpful to us on multiple level.

Lessons learned? Challenges?

Always make sure of the Security Deposit amounts held by the owner (per the lease agreements) BEFORE and make sure those are transferred at the time of sale.

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

I worked for an erstwhile lender-cum-laude named Derek, who has left his role for bigger pursuits. Derek taught me a great thing though - a lender can be a guy who inputs data into a computer system and tells you what the screen says, or he can be a ninja that does that. You'll always want to have the ninja who can do the LO role. They understand how to give you the best for your situation.