First RE deal ever: Househack turned Buy/Hold

[Matt Guignon]

Investment Info:

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

Purchase price: $149,900
Cash invested: $7,000

Fully leased 2b/1ba North Hampton Duplex.
* Property Cash Flows approx $250 after PITI and OpEx
* Property recently appraised for 15% more than the purchase price. Property purchased 10 months prior to appraisal
*Originally House-Hacked. Moved out and leased available unit.
*Current Market Value (Oct 2020) - $185,000
*15% Rental rate increase over last 2 years. Market Data indicates this is continuing to climb

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

This deal made sense as a house hack and first investment. The neighborhood is established, but has room for growth and redevelopment. Strong rental community of younger families and blue collar workers, in an urban neighborhood. Tenants have been easy to find, and the property had minor value add opportunities, but had sound mechanical systems and finishes. Perfect duplex to get my first experience as a landlord and REI

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

MLS. Used a real estate agent

How did you finance this deal?

5% Conventional Loan

How did you add value to the deal?

I was able to raise rents, paint, landscape, and remediate an insect and bat infestation. As a result, I have attracted higher class tenants who are willing to pay higher rent and have increased the value of the property through addressing the deferred maintenance I had inherited.

What was the outcome?

I still own this property and has been stabilized. Occupied with great tenants, with very few maintenance issues. Rents are steadily increasing each year, and may still be on the low end of rental rates for the area.