My First Property-Purchased 2013

[April Vogt]

Investment Info:

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

Purchase price: $174,000
Cash invested: $42,000

BRRR style live in remodel small duplex-did most of the work myself. **Don't judge my design choices, this was over 7 years ago :)
Increased rents to match market
Refinanced and utilized Heloc to purchase second property
Multi-function property with 1 long term tenant & one successful STR unit. Vacancy less than 1% for LTR (common in this market) and 90%+ occupancy rates for STR

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

I wasn't looking for a deal, and almost wasn't looking for any real estate. I was saving money for a year long 'around the world' trip and changed my mind suddenly in the course of a few days. My W-2 income wasn't great but I had high savings, and my lender let me know that I most likely would only qualify for a small multi-family. A few months later, I was the proud owner of a 'lipstick flip' that had been purchased by an out of town company just 5 months prior.

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

I used a friend for my realtor, he was absolutely great in the process and now I recommend him to everyone. He sent me the deal from the MLS. No real negation, but the purchase price was lowered a few thousand to match the appraisal, which was a condition of my loan.

How did you finance this deal?

I used my savings plus a small loan from my parents to reach 20% so I wouldn't have PMI

How did you add value to the deal?

During my first summer of ownership of I worked days on the property renovating while working nights bartending. I sourced goods from Craiglist, Habitat for Humanity ReStore and enlisted the help of any friend that would help me. After that initial period, I did larger ticket upgrades that I couldn't do myself over the next 2 years as I could afford it, including new windows, front doors, exterior paint, adding a driveway & tree removal.

What was the outcome?

I was able to rent to a friend of mine a week after completing the front unit, and lived in the property myself for about 3 years. I was able to refinance to a 20 year loan, and get a sizable HELOC that helped fund my next purchase. I haven't had an appraisal for quite some time now but I would estimate a value of over $330k

Lessons learned? Challenges?

Don't sweat the small stuff so much-everything is fixable! I probably would have utilized 0% credit cards a bit more for the remodel- I paid almost everything in cash. Now that I know a lot more about layout & design options I definitely would have move things around a bit inside each of the units! I also learned its ok to pay for some of the work yourself, especially stuff you don't like doing. At summer's end I remember 'having done 2 fun things with friends' and some pretty bad carpal tunnel.

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

Yes! Sam Holmes of South Lake Tahoe and Ron Yokotake of Associated Mortgage in South Lake Tahoe