Purchased my 1st multi family house

[Emanuel Ohunwu]

Investment Info:

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

Purchase price: $200,000
Cash invested: $5,300

Purchased a duplex from another investor in Ft.Worth, TX. The duplex already has tenants living in one section of the duplex. The tenants pay $950 a month. I pay myself 1k a month in rent to stay in the other side. I only have to pay $600 technically, because the tenants pay $950. I just choose to pay myself market rate to live in my side as a way to save for another home if that makes sense. My mortgage is $1,550 a month.

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

The location of the duplex! It's close to a major highway in Ft.Worth. Its also close to shopping, schools, hospitals and DFW airport.

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

The deal was found on the MLS. There was some deferred maintenance. All the home needed is foundation repair ($2000) and new flooring in one side of the duplex ($3000). I was able to negotiate 7k towards closing cost. Additionally,I got $950 rent from the seller and the $850 security deposit at closing. So my closing cost out of pocket was $5,300. Rent and security deposit are being saved.

How did you finance this deal?

I used an fha loan.

How did you add value to the deal?

New flooring, appliances, and landscaping on the other side of the duplex. The other duplex doesn't need any work at this time.

What was the outcome?

I live in the other side of the duplex. This is the side I'm renovating. I plan on renting it out next yr for 1200 a month. This is $200 above the current market rent. I hope to be able to get that much with the renovations I'm doing.

Lessons learned? Challenges?

It was a hassle dealing with the seller. The seller tried to break FHA guidelines by selling the home less than 3 months after purchasing. I knew he was selling after such a short hold time, but I didn't know it could cause problems with an FHA loan. The lender caught the problem during the title search. So I had to restart the process for an FHA loan. Another application and new appraisal was needed. I was able to get a credit from the lender for the 2nd appraisal.