1st duplex in STL, MO - OOS Investor from Los Angeles

[Alex Bekeza]

Investment Info:

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

Purchase price: $89,000
Cash invested: $89,000

2020 was certainly one "helluva year" and it was the year I bought my first investment property!

This is a duplex in the Carondelet Park area of Saint Louis, Missouri.

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

I've been a Loan Officer specializing in commercial and portfolio financing for about 3 years. I've financed dozens of BRRRR deals, Flips, and Multifamily Apartment Buildings all over the US. That being said, I've had my eyes on some mid west cash flow for quite some time.

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

This thing fell from the heavens straight into my lap. The seller is one of my favorite clients, a LA resident like me but a native of STL, and just a top-notch dude in general. Long story short, the seller faced a ballooning note which became days away allowing me to structure a win-win scenario where I would close cash right away and offer the balance owed + realtor fee/closing costs.

How did you finance this deal?

I paid all cash which was the entire reason I was able to get the deal and close within 10 days.

Unfortunately, "Fannie Mae Delayed Financing Exception" was not an option because the costs/fees associated would be too high to qualify as QM. I'll allow this to season six months and then cash out at 75% LTV and leave little to no cash in the deal.

Purchased for $89,000 all cash. As Is appraised value estimated $120,000. Future cash out refi loan will be about $90,000.

How did you add value to the deal?

I was actually the LO who originated the purchase loan for the seller. Therefore, I have the full scope of work and he renovated the place from head to toe. I only have to do some minor touches here and there and eventually remodel the "sun rooms" which are an awesome little feature that could get updated once units become vacant.

Rents are currently - $1,025 ($525 + $500)
Property Manager = 9%
Taxes/Insurance = $184 per month

What was the outcome?

I'm in the landlord club and ended the spell of analysis paralysis!

Lessons learned? Challenges?

I learned a lot of little things about STL and mostly how to leverage referrals from people you trust.

I learned more about Opportunity Zones by complete accident!  I liquidated my stocks to purchase this property and looks like I will now pay no capital gains tax on those stocks because I bought this property in an opportunity zone using those proceeds. 

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

Moe from Title Premier, Realtor Tammy Derrigan, my STL investing mentor Bennie, and Property Manager Alann from Provident PM have all been rock stars!