Buy and Hold Investment

[Gerald Bowman]

Investment Info:

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

Purchase price: $123,500
Cash invested: $35,400

When I inherited the property there was two tenants. Both long term but paying significantly below market rate. One tenant had a housing voucher and the other was normal tenancy. One tenant was paying $575 per month and the other tenant was paying $525.

How did you finance this deal?

Purchased property using a HELOC from another investment with a conventional loan which was 20% down.

How did you add value to the deal?

When that tenant in unit 1 vacated I updated the unit to today's standards and adjusted the rent accordingly.

What was the outcome?

Both tenants lease expired roughly three months after purchase. I requested a rent increased that unfortunately one of the tenants could not afford. Long term tenants rent was raised to $950 per month and new tenants rent was raised to $1011. Both units currently occupied. Mortgage and insurance $764. I have to pay the water for both units. Monthly net cashflow roughly $1100 a month.