First rental, an ugly mustard yellow Duplex

[Dylan Paul]

Seriously, mustard yellow!? 

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Dayton, Ohio.

Purchase price: $69,500
Cash invested: $17,375 (25% down, Conventional 30 yrs @ 4.625%) + $1200 in random odds and ends = $19,375


This is our first rental and is a duplex, 3 bed 1 bath a side. Purchased sight unseen!

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

Stable cash-flowing duplex located less than 10 minutes from Downtown where there are multiple big employers and a large Private University. It is the only Small-multi in a neighborhood of Single Family homes. Tenants have been in place since early 2017 and are related to each other.

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

Automatic email from our criteria set up through the MLS. It was in a neighborhood we had driven multiple times while driving for dollars. We ran the worst case numbers and decided to pursue the deal. We were aiming for positive cash flow of $125 a door with 12% COC after 10% property management, 15% CapEx/Repairs, and 8% Vacancy.

How did you finance this deal?

Conventional financing, 30 yrs @ 4.625% with 25% down.

How did you add value to the deal?

We negotiated repairs from the seller to cover most of the work required. Rents are currently 15-20% under market value due general deferred interior items including dated carpet, lower quality laminate flooring, and paint. The previous landlord did not implement any routine rent raise schedule.

What was the outcome?

90 days in we've been extremely happy. There have been minor issues and tenant training in regards to communicating via the property manager so all parties are involved (my personal number was given to both tenants by the selling agent and they tried multiple times to circumvent our management team by contacting me directly for leasing, repairs, etc).

Lessons learned? Challenges?

The biggest challenge is being patient to recoup the 25% down payment as we're ready for the next deal already :) We feel extremely fortunate to have a property manager on board that has been very approachable and receptive to our goals. 

What's next?
We plan to continue to save approx 40-50% of all W-2 earnings to purchase a house-hack duplex.