Multi Family Purchase

[Andrew Pettitt]

Investment Info:

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

Purchase price: $778,000
Cash invested: $155,000

2 units, 1680 sq/ft per unit, 3 beds, 2.5 bathrooms. Built November 2019.

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

I have been house hacking my primary residence (I moved out and rent it nightly on Airbnb). The earnings and growth potential made me want to get more into real estate. I thought this would be a good experience to go through my projections/forecasts prior to the deal and then compare them to reality a few months after the purchase. My first property was purchased for myself so I didn't go through any rental projections, etc.

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

I saw the listing on MLS and called the realtor. Construction had not started on the unit so I used that as leverage to strike a deal for two units.

How did you finance this deal?

A mix of personal cash and existing equity. I pulled equity out of my primary residence to cover 2/3 of the down payment (20% down). I used cash to cover the remaining 1/3 balance. Roughly $620K is financed through a traditional mortgage.

What was the outcome?

The purchase nets $5,000-month in rent.