2nd purchase as a Newbie

[Eva Neikirk]

Investment Info:

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

Purchase price: $27,971
Cash invested: $54,000

Occupied Duplex purchased on tax sale.
2- 2/1 units, hardwood and vinyl floors.
Replaced water heaters, roof, siding, HVACs.
Long term tenants at under market rent.

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

Son owns duplex 2 doors down the street.
The price was right. I trusted the owner that everything was in good condition...LOL.
I knew that they didn’t plan to redeem the property after the tax sale.

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

My son’s handyman connected me with the owner of 2 duplexes on same street. I made offer for both, but he declined.
Then county seized one for tax sale and I bought it with his blessing.

How did you finance this deal?

Cash

How did you add value to the deal?

Replaced 1 furnace, then roof, siding, 2 HVACs, some interior paint, electrical outlets.
Now in progress on replacing windows, kitchen/dining floor with LVP.

What was the outcome?

Property much improved, but expenses exceeding rents.
Seems the more I improve, the more demands and complaints I get from the tenants.

Lessons learned? Challenges?

Again, I should have paid for a professional inspection possibly before the tax sale, but surely once I had clear title so I could predict major expenses, budget for them and raise rents accordingly.
I backed off when the tenants threatened to leave if rent was raised. As it is, rents did cover the expenses so far, but now I do need to raise the rents mid Covid

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

For HVAC- Hiller Heating, Cooling &Electrical. Financed by GreenSky