My First Deal - Catching Up

[Drew Sylvia]

Investment Info:

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

Purchase price: $285,000
Cash invested: $12,500

First real estate investment. Acquired with a friend as a partner (50/50 split). Partner and I both occupy one (each) of the 3 units and we rent out the 3rd.
Rent on 3rd unit (second floor) is $1,100.

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

The idea of being able to have a piece of property that we could hold for a significant period of time with slightly above average rents was intriguing. The building was newly renovated (turn-key) so it made the most sense to us at the time.
We structured it as a quasi-househack, where we each occupy a unit and rent out the third.
Thought it the best way to get into the real estate game.

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

We had seen it on the MLS, it quickly went under contract with another buyer. Their financing didn't work out and it popped back up on the MLS and we had our agent jump at it right away.
The seller was a local flipper who was looking to sell to get his hard money covered.
Went in with an offer slightly under asking and got it accepted with minimal issues.

How did you finance this deal?

FHA loan under both parties. Put 3.5% down and financed the rest.

How did you add value to the deal?

The place was already completely renovated inside.
We have been working on the exterior, yard, garage and basement to add some storage and other value items.

Lessons learned? Challenges?

It can be difficult to manage especially while working full time and not having a lot of time to be in the property (aside from sleeping and such). Biggest challenge for me is being able to find the time to put into the renovation projects that are needed.

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

We worked with Janice Hathaway as our agent. She is very experienced in the area and has a lot of connections.
She also had worked with the selling agent many times before so that was a relatively smooth process.
She also had connections with a good home inspector and lender (Embrace Home Loans) and they were great!