First deal - went about as well as expected

[Clayton Hutton]

Investment Info:

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

Purchase price: $106,000
Cash invested: $5,000

In need of moderate repair and submetering, on minor foundational issue. Outside otherwise in decent shape with a little bit of modernization needed.

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

This seemed like the best deal I could make happen given my relative inexperience with buying/rehabbing from in investment mindset.

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

Found through a brokerage agent.

How did you finance this deal?

Using traditional financing. This was the route used because it made the most sense given the price range, deals I was able to negotiate. We were at an inflection point of sorts where it just made more sense overall to do a traditional finance route as opposed to a hard money route.

How did you add value to the deal?

Repairs to bring up value were minimal. It's currently winter weather, so I'm waiting to work on the exterior, but other issues have mostly been taken care of.

What was the outcome?

The outcome is still pending. So far it cashflows a bit under where I would like it. I'm currently on the fence on how to sub-meter or if I should just move it back to a single unit. It was listed as a duplex, is mostly set up that way, however it shares central air and the headache between the two tenants is pushing me towards changing it to a single family for both cashflow and maintenance.

Lessons learned? Challenges?

Figure out how to verify that a unit is submetered. I called the electric company and they informed me there were two units they had listed and it was sub-metered. The real estate agent said it was sub-metered. I should have moved about hiring another inspector that could verify that was indeed the case instead of relying on this route.