Two-Family in Jersey City with Challenging First Year

[Alejandro Tirso]

Investment Info:

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

Purchase price: $649,000
Cash invested: $100,000

Run down 2 family where I did updates including: electrical service upgrade, new kitchen in one unit, new siding & gutters, painted entire interior, new luxury flooring, new windows. Used owner-occupant financing to keep acquisition costs lower. Buy-and-hold as a long-term rental.

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

Outside of NYC makes for good long-term price appreciation and strong rental demand (it did pre-covid at least).

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

MLS w/ realtor

How did you finance this deal?

Conventional Loan

How did you add value to the deal?

See description

What was the outcome?

Rehabbed and rent.

Lessons learned? Challenges?

Maintenance is a serious issue on older properties. Need to account for significant costs in first year, especially for basements that have no been waterproofed properly.

In order to BRRRR or make these rehabs worthwile need to dealhunt. Purchase price really does drive everything; Bought too high to be able to BRRRR, but owner-occupied financing saved this from a ROI perspective. Tuition paid to get in the game and countless rehab/property mgmt lessons along the way.