First Multi Family Investment

[Timothy Mitchell]

Investment Info:

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

Purchase price: $376,000
Cash invested: $20,000

4 Unit found on the MLS.
After acquisition:
Utilities were separated and sub metered for each unit.
Rents were increased to market value.
Minor repairs were made.
Annual Leases were initiated.
After 6 months property was refinanced with a Lower Rate.
Property is now at a 24% ROI

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

I was looking for a deal that would provide steady long term cash flow, required minimum conversion, and in a relatively stable market. Separate utilities or at least a reasonable way to separate to lower expense and increase revenue was necessary for this deal.

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

I found this deal on the MLS. My initial offer was denied. We settled on $376,000 which was $6,000 above the listing price with the closing costs paid by the seller.

How did you finance this deal?

I financed this deal with 3.5 down at 4.625, refinancing after 6 months to a rate of 3.5

How did you add value to the deal?

This property required decreasing expenses and increasing income.
That included separating utilities and including them in the new leases for each unit which also contained increased rent increasing at 4% annually as well.

What was the outcome?

The outcome was a cash flowing property with a 24% ROI after all expenses and projections.

Lessons learned? Challenges?

The biggest lesson of all I learned on this property was learning how to just pull the trigger.
Due diligence is important and so is having a strong network of professionals that know more than you do!
DOING the deal was important for me to learn exactly what I need to improve on moving forward in Real Estate Investing. I look forward to many more in the future.

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

I would recommend Sean Pinette, an agent of Harborview Properties. I consider Sean a great friend in the beginning of my Real Estate Journey and a fantastic representation of Harborview Properties.
I would recommend Jay Joyce over at Stonecoast Mortgage. Jay was able to help me navigate the sometimes confusing world of Real Estate financing and terms that go with it. I have a much better understanding on Real Estate thanks to him and Stonecoast Mortgage.