2nd real estate purchase in DeKalb, IL

[John S.]

Investment Info:

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

Purchase price: $215,500
Cash invested: $65,000

Side-by-side duplex with 2,000 sq/ft on each side. 3 bed 2.5 bath each.

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

Opportunity to update and have a cash flowing property.

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

The was a property listed on the MLS that my wife and I saw on Redfin as soon as it was posted. I originally said no due to the property taxes, but my wife pushed me to look harder and we realized it was actually underpriced. We were one of 4 bids on the first day and we went over original list by almost 8%. Apparently we were the only bidder not offering cash so that forced the price up higher...

How did you finance this deal?

Conventional loan from a mortgage broker. Used some of our HELOC on our primary residence.

How did you add value to the deal?

All new kitchen appliances and new flowing inside the kitchen. New vanities, new flooring, and new toilets in all 3 bathrooms. Power washed and stained the deck.

What was the outcome?

Cash flowing rental property with great bones. One tenant was quired in the property and has been there for 25 years. We have yet to up her rent to change her lease, but it is up in 2020.

Lessons learned? Challenges?

Hiring contractors can be quite expensive. It's great if you can do the work yourself, but also do the cost analysis of losing time with your family. I spent almost every day for an entire month there and regret not hiring some more help to get it done faster.

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

Nope.