First property - 3-unit multi family

[James P Laurens]

Investment Info:

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

Purchase price: $227,000
Cash invested: $40,000

3/2 2000 sqft 1930’s Craftsman Bungalow, 2/1 1950’s Ranch, Studio Loft over a 2 car garage. Rent out garage bays separate.

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

One of my mentors early on pointed out the security in multi family properties, one loan with multiple people paying it, generally cash flows better and helps insulate from vacancies.

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

MLS. I'm an agent and noticed it had been sitting for 6 months on the market.

How did you finance this deal?

FHA owner occupant loan. 3.5% down. Used my commission for most of the down payment, seller paid all closing costs.

How did you add value to the deal?

Only painted the interior of the big house, the small house for new wiring, central hvac, and a new kitchen which allowed the laundry to be inside instead of on the back patio. Finished out the loft over the garage.

What was the outcome?

100% rented with happy tenants.

Lessons learned? Challenges?

Everything costs more and takes much longer than anticipated.

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

I represented myself as a licensed agent.