Buy and Hold with gravy

[Ed McIver]

Investment Info:

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

Purchase price: $105,000
Cash invested: $30,000

I was contacted by a wholesaler who had a lead on the property. The property was originally offered at $120,000. Due to the collapsing economy I said I would only consider "great" deals. I offered $100,000 without knowing knowing the address or condition. I only knew the town and it is fully rented.
As it turned out the seller was motivated and the contract was signed yesterday,
The house has issues. My biggest concern is the electrical service. I will need to upgrade the wiring within 30 days of the sale of the house. I have already had an electrician review everything.

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

I am investing for retirement. I do not take profit out of my real estate company. My goal is to have $100,000 in profit in 10 years. This property will bring me $12,000 per year closer.

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

It was brought to me by a wholesaler. I will only consider great deals right now. So we asked for a $20,000 discount before I was off the phone.

How did you finance this deal?

I am getting a conventional loan 5.25 %

How did you add value to the deal?

The property has a large out building. I will be renting the building out separately. 100 to 200 /month

What was the outcome?

So far so good.

Lessons learned? Challenges?

The seller was a bit hesitant. We agreed on a price early but he did not seem to want to sign the contract. Finally I gave a 5 PM dead line.