This is a 3 unit property. 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. Currently one unit is rented on Air BnB 6 months out of the year and has a College student during the school year. The other two units have full time tenants. I no longer live in the state and the property is managed by a friend.

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

I was living in one of the apartments and was tired of seeing the empty studs on the empty/gutted unit next to me. I thought, "why not buy this and work on it in my spare time" and I did. I did some rough math and figured I could live rent free and maybe put a few bucks in my pocket when I was done. 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 so we made a deal.

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

As mentioned, I was living in one of the apartments. I just asked if he would sell it. He gave me a price of $66,500. I felt that was fair so I accepted.

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 on the mortgage. I used to be part owner of a roofing company and we had a 100k line of credit. I used that line of credit and some of my many credit cards to finance the remodel and then I got a Home Equity loan to pay that back.

How did you add value to the deal?

I did about 50% of the rehab work myself. I utilized relationships which connected me 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 on an hourly wage.

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.