My first rental purchase

[Ryan Prichard]

Investment Info:

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

Purchase price: $138,000
Cash invested: $34,500

My business partner and I wanted to be able to build passive income and have something in 5-10 years that can give him and I each $60,000 a year. We valued this property in GGR for good rent, ability to increase rents, renovate, resell higher, and high market appreciation rates.

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

Looking to build wealth outside of 401(K). Looking to get my business name made and cash flowing properties. Knowing many lenders are wanting 2+ years to lend to business name only.

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

MLS. It went under contract, fell through for a bad roof, seller replaced the roof, and relisted same price. We came in and offered lower and them paying closing costs. Then negotiated seller making repairs when under contract.

How did you finance this deal?

25% Conventional RE Loan. Northpointe Bank

How did you add value to the deal?

Capitalization rate and insuring it cash flowed each month. Including the use of a property manager. Reviewed all lease agreements and rent roll.

What was the outcome?

Cash flowing property. Have done zero repairs and now appreciate close to $170,000. If we renovate it and replace tenants (or not) could sell for $220,000.

Lessons learned? Challenges?

Was my first multi-family purchase everything was learning. Had done plenty of single-family deals. Since this deal, I have been able to lock in 8 more homes for clients and myself. And have a bench of three buyers looking at multi-family now.