Newbie gets his first duplex

[Spencer Small]

Investment Info:

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

Purchase price: $38,500
Cash invested: $56,000

First BRRR deal. I just acquired it and my contractor is doing the rehab which will take a month. I will have to wait 6 months to do a cash out refinance.

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

Being able to recycle my money to buy more properties. I bought it from a couple brothers that had family living in it paying way under market value with no lease, so I was able to have closing contingent on it being vacant.

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

MLS. I spoke to the realtor and asked if the owners might consider creative financing. He said no. I called back a couple weeks later and told the agent I wanted to put an offer on it sight unseen contingent on showing, inspection, and vacant at closing. I agreed to counter offer and was able to bring down the price another $2500 after inspection ( I asked for 4K).

How did you finance this deal?

I paid cash. I took out a 5 year loan for 50K @ 1.625% bond rate from a government retirement account.

How did you add value to the deal?

We are doing new kitchens, baths, taking down some paneling and replacing with drywall, new paint throughout, new gutters, fascia, some roof work, refinish all original hardwood floors, update some electrical, update some plumbing, etc.

What was the outcome?

Still not there yet.

Lessons learned? Challenges?

I had a dual agent that left few mistakes in the closing docs so it was really on me to make sure everything I signed was correct. The title company never received to the final purchase price after inspection. The title company also didn't account for my earnest money deposit. I had to have them fix them both before closing. I won't use them again.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

No