1st Rental investment (buy & hold)

[Joshua Doetsch]

Investment Info:

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

Purchase price: $80,000
Cash invested: $16,000

2 unit property
- 1 single family house 3 bd/1.5 bath
- 1 single family 1 bd/bath

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

The 2 separate units on the same lot, as well as analyzing the property which is why I offered $80,000 instead of the asking of $90,000.

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

I analyzed many properties to learn the craft & this property fit what I was trying to do. They were asking $90,000 with other offers getting prepared & my realtor suggested a offer of $85,000 maybe $82,500. I decided to offer $80,000 because that was the number that worked, contingent on repairs being made & they pay closing cost. Which was accepted. (Kinda wish I would've offered lower now)

How did you finance this deal?

I found a portfolio lender which I knew was a good relationship to have providing portfolio lenders are typically more flexible with loans. I put 20% down which was about $16,000. I put $8,000 down of my own money & found private money (My parents) who lent the other $8,000.

How did you add value to the deal?

I offered a price that fit my plan & improved vacancy rate.
Continuing to update property.

What was the outcome?

I planned to move into the property & house hack. The desire to lower my expenses exceeded house hacking so I moved back in with my parents while I began my real estate investing journey. I am getting $1,450 in rent Which results in a $450 plus each month in cashflow after all expenses (PITI, Utilities, Repairs, Capital Expenditures, Vacancy, etc.)

Lessons learned? Challenges?

Finding a lender that would lend money to someone at the age of 21. I had better luck with local smaller lenders as they can be more lenient with there loan products as well.