My first fourplex was scary, but still one of my best purchases

[Jacob Pereira]

Investment Info:

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

Purchase price: $220,000
Cash invested: $25,000

This is a fourplex in one of the worst parts of Austin (full disclosure: no parts of Austin are all that bad). Nobody was willing to tackle it, and I'll admit, I was a bit intimidated as well. It now cashflows very well and has more than doubled in value. To anyone who is afraid to tackle a difficult project, absolutely do your due diligence, but if you've done the work and the numbers still pan out, you will be fine.

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

I had bought a duplex before and the money was very good, but this fourplex had insanely good metrics

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

It was an expired MLS listing. I reached out to the owner and made an offer. A bit of back and forth, and it was mine.

How did you finance this deal?

Conventional

How did you add value to the deal?

Remove the problem tenants, enforce the rules with the decent ones, and clean and repair the issues inside and out

What was the outcome?

It's currently worth about double what I put into it (including leverage), and with a conservative cashflow estimate that accounts for future capital costs and vacancy it's still cashflowing over $2k a month

Lessons learned? Challenges?

Not only don't be afraid of problems, actively seek problems. Nobody is going to give you a deal on something easy, but if you're willing and able to solve someone else's problems you will do well in this industry.

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

Yes. Myself, of course!

[Eric Mielke]

Congrats on the success! I love how you found the deal with expired listings from the MLS and the fact that you were willing to tackle a difficult project! Perhaps that "99 Problems" song could be a successful REI's theme song?