3 unit property. I was living in one unit when I bought the property from the land lord. One unit is two bed/two bath, the other is two units are one bed/one bath. I paid $66,500 for it, put about $20k of my own money in it including the down payment/closing costs and some repairs. I took out a 35K Home equity loan to remodel the main apartment (which was completely gutted when I bought it), repaint the outside, some roof work, landscaping work, expand the driveway, new sidewalks and a new concrete patio out back. Split the garage into 3 separate storage units. I did some of the work myself but hired an unemployed contractor friend to do the rest. The property is currently managed by a friend. The unit I used to live in has been an Air BnB over summer and occupied by a college student over winter for the past 3 seasons. I plan on switching it back to a full time tenant soon.

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

I was living in one of the units. The unit next to me was gutted and the land lord wasn't currently working on it. I grew up in contracting so I knew I could do a lot of the work myself. I just asked him if he would like to sell it to me and he said yes. We made a deal. Currently it is Cash Flowing about $450 a month but I will be making some changes which will push that to about $570 a month very soon.

How did you finance this deal?

I financed it through my local bank. I've done business with them for years. They knew me well and they worked with me.

How did you add value to the deal?

I did about 50% of the rehab work myself. I utilized relationships to hook me up with a talented individual who had just moved to the area and didn't yet have a job. This guy did the rest of the work for me hourly.

I expanded the parking lot out back to make room for two cars for each unit off street parking. I divided the garage into 3 storage units approximately 6'x24'.

What was the outcome?

My current Cash on Cash return is about 27% annually. When I add annual principal pay down I am at about a 42% ROI annually. Because of the increased ARV by all the repairs I've done, I've been told the property is now worth between $130k and 150k.

Lessons learned? Challenges?

I happened to luck out with this deal. When I did the deal and the remodel it was mostly gut instinct. I didn't know anything about Bigger Pockets, Cash on Cash return, ARV. I didn't know how to run the numbers. My next property will be more well thought out before I take the plunge. I now reside in Fort Collins CO and plan to start investing here. Obviously this is a much different market than Western NY state so I will probably need some hard money lenders to make the next deal fly.