Buying 2 duplexes as my 2nd and 3rd properties.

[Adam Hughes]

Investment Info:

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

Purchase price: $182,500
Cash invested: $1,000

I was able to use equity in another property to buy this duplex and another duplex across the block from this property. These were our 2nd and 3rd investment properties and part of 5 doors we bought in 2020. These will be buy and hold properties with a goal of refinancing and raising rents over the next 5 years to get them cash flowing at least $500 per door.

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

I had the equity in a farm that I bought and decided to use that as a way to accelerate my real estate investing. This was a package deal of 2 duplexes on the same block that were both built in 2005. These units fit my investment strategy well. They are newer so capital and operating expenses should remain low. In addition, I thought the previous owner did not manage well and there was room to raise rents by $100 per month, though not immediately.

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

Found the deal on realtor, knew it fit my model, and I made an offer after the units were on realtor for about 12 hours. Worked in to the offer that I didn't need to see the units until we had a contract which the seller loved because we did not have bother the tenants unnecessarily. Asking was $350,000 and I got it for $335,000.

How did you finance this deal?

Portfolio loan with a local bank and no money down due to equity in another property.

How did you add value to the deal?

Able to raise rents on one of the units right away.

Lessons learned? Challenges?

Don't trust the seller and read your closing statement. I'll save the long story for another time.