A CHALLENGER APPROACHES

[Dan Mann]

Investment Info:

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

Purchase price: $40,000
Cash invested: $40,000
Sale price: $45,000

First rental property ever. two long term tenants who want to stay. I want them to stay.

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

This was a good first property to get my wife on board with as it was inexpensive considering. It is only 5 min from where I work so I can swing by easy before or after work. After working up the numbers it just seemed to make the most sense.

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

I found this deal on Zillow listed at $45,000. I was able to get to know the realtor decently well and checked out the property with him. He is also the owner of this property. There was some things he wanted to get done which will cost close to nothing, but time. He doesn't have time so I said I will take it for $40,000 and do the work instead.

How did you finance this deal?

I took out a HELOC on my primary residence.

How did you add value to the deal?

By taking on the minor tasks myself I saved myself $5,000. By taking out a HELOC instead of traditional financing I saved about $6,000 of closing costs.