My First Deal Bank Owned 2 Family in Whitman MA

[Jason DaSilva]

Investment Info:

Small multi-family (2-4 units) fix & flip investment in Whitman.

Purchase price: $210,000
Cash invested: $30,000
Sale price: $332,500

Hey Guys, I wanted to share my first deal. This is going back to 2011 when you could find a good deal pretty much anywhere you looked . I was living in a 1 bd apartment with my wife and 1 y/o daughter. We knew we out grew our apartment but we had different ideas of what our next move should look like. I knew I wanted to buy a rental property in need of rehab, she wanted her dream home. I gave her my best sales pitch and she agreed to buy the rental 1st and push off that dream home.

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

It was bank owned, had two large units and wasn't in the ghetto. I was looking in some pretty tough areas because as I mentioned we were just starting out and didn't have much money. With it being in a nicer town then most of the other deals we were looking at we knew we could also get more in rent.

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

Negotiate, what is that??? LOL. As I mentioned I was new to this whole thing didn't know you could negotiate bank owned deals. I thought that was the price and that was it. So I paid full asking price.

How did you finance this deal?

This is were it got fun, I used a 203k Reno loan. It was great because I only had to put 3.5% down and I could finance the repairs. The downside is your really have to be organized with all your paperwork and have accurate bids prior to closing on the deal. So how it worked with us, they gave us 3 draws, you do not get money until you finish certain portions of the reno. So in the end it was great but it had a lot of moving parts. Definitely need to a have a good agent to help with this.

How did you add value to the deal?

We made made minor structural repairs, flooring, paint, and a new kitchen. We also cleaned up the landscaping and added a brick paver walkway to give it great curb appeal.

What was the outcome?

My plan was buy and hold, the whole time I lived there I had the same tenants and they were the best. Unfortunately they ended up getting divorced and moving out the same month we moved into our single family home. So now I have 2 units vacant and were struggling to find quality tenants. My RE agent contacted me and said she thought it might be a good time to sell and make good money. The house sold in 3 days and I walked out of the closing with a check for $90,000+.

Lessons learned? Challenges?

1st, I should have negotiated the purchase price.
2nd, I should have read the book on Managing Rental Properties by BT (great book check it out) it would have help with the
marketing the rental and finding better tenant and every other aspect of managing the property.
3rd, Do not sell property. I know I walked with $90,000 which was great, but the person who really got the great deal was the women I sold it to. She bought it for $332,500 and it has a Redfin estimated value of $532,200.

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

Yes, Nancy Doyle with Coldwell Banker is GREAT. Her and her son Bo have partnered and they are fantastic. If you are in the South Shore/ South Coast of MA look them up.