First Multi-Family Deal

[Cale Delaney]

Investment Info:

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

Purchase price: $400,000
Cash invested: $44,000

Just closed on a 4 plex in Lake Worth Beach, FL. This is my first venture into MFH (have a couple SFH that I rent and house-hack). I focused on the Lake Worth Beach area, specifically in the corridor between Dixie Hwy and the intracoastal (the sweet spot!), because it's an historic district and a very walkable/bike-able area, even to the beach and my ultimate goal is to convert to short term rental with it.
The property is (1) 2/1, (2) 1/1, and a studio.

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

My "Why" is to get financially free to be able to spend quality time with my family (3 kids!) and travel more (my passion). As such, I see real estate as the way to achieve this.

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

Zillow, MLS, and walking the area. I walked the entire area of this town that I was interested in and looked at many properties and made numerous offers. I'd made an offer on this one that was rejected and circled back about a month later with another offer and it was accepted this time.

How did you finance this deal?

Conventional financing. 15 yr term, 30 yr amortization. 3.625% rate.
I used the same lender I've been using the past 10 years and they typically get the best rates and products. I've used them on multiple purchases and refi's.

How did you add value to the deal?

Insurance is high due to one building not having hurricane clips. Looking to add these and reduce insurance by $3k.
Planning to raise rents up to market as leases expire over the next 6 months.
Will be looking to convert to STR in the near future.

Lessons learned? Challenges?

Closing was challenging as I bought this with an out of state partner and the title agent was very difficult to deal with in terms of doing a dual closing. Other than that, the financing went through with no issue.

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

I'm an agent so I represented myself as the buyer.
Steve Berry with Liberty Financial (part of Evansville Teachers Credit Union). He's the branch manager and I've used him on all my purchases and refi's for the past 10 years. Great products and rates.
We didn't use them on this transaction, but wish we did! Blueline Title Company. I've used them on other transactions and they are very easy to work with.