First Buy and Hold Investment

[Matthew Reid]

Investment Info:

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

Purchase price: $180,000
Cash invested: $9,000

Purchased a Duplex with each unit having 4 Bedrooms and 2 Bath for $150,000. I was able to finance all $30,000 in repairs. The property is in a C+/B working class neighborhood. I am now bringing in $2,075 in rental income every month. Looking forward to my next investment.

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

I was looking at my retirement one day at work and realized that if I stayed on the same path I was on I'd be working for the man FOREVER!!!!!!

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

I found this deal on the MLS and was able to negotiate the price down considerably by understanding the position that the sellers were in.

How did you finance this deal?

I financed the deal with an investment Loan by financing the $30,000 in repairs needed on the property and a 10% down payment. I ended up getting paid $16,000 at closing.

What was the outcome?

The outcome thus far has been a great cash flowing property. I feel like I have great tenants in each unit and it has been very passive since I have gotten them rented out.

Lessons learned? Challenges?

I learned a whole lot about contracts and scope of work. I now know that when writing up a scope of work I need to be as detailed as possible down to who is purchasing outlet covers to avoid confusion with contractors. I now know that in the future this will make the process run much smoother because contractors will know exactly what their responsibilities are.

I also learned that the best way to learn about financing deals is to just call up banks and just talk to a loan officer.

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

Yes I worked with Koal Benson at Elite Realty and Arkansas Craftsman was my contractor. I highly recommend both. Both are very professional. I should also give a shout out to Donna Rogers with Centennial Bank. She was able to answer every single question I asked and walked me through the entire financing process.