Our First Investment

[Shane Blackshear]

Investment Info:

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

Purchase price: $110,825
Cash invested: $30,000

This was a house-hack and our first home. It's a 2/1 - 1/1 duplex. We moved into the 2/1 side and leased out the 1/1. This was a foreclosure. We made a few small improvements when we first moved in, and then tons of improvements over time. When we moved in 2015, kept this duplex and have leased out both sides ever since. I've included some before and after pictures.

We've refinanced a few times and did a cashout once. Currently it's cashflowing at $1,047 a month.

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

Homeownership and investing was always a goal. In 2013 I was seeing the prices in Austin skyrocket and knew I needed to get into the market asap. I also saw that buying a duplex instead of a SFH would almost pay for itself with rent from one side.

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

I found this deal on the MLS. It was a foreclosure. Because of the way the foreclosure worked, the price was non negotiable so the only question was could I make the needed improvements and still make the numbers work.

How did you finance this deal?

I financed this through a local community bank. I had to put down 20% and the interest rate wasn't great, but because of this properties condition this was about my only option. After a year or so we refinanced with traditional lender at a much better interest rate.

How did you add value to the deal?

Because this property was distressed, it wasn't hard to see what could be done to add value here.

What was the outcome?

We made tons of improvements when we lived in the duplex. Also, I'd make a few improvements between tenants on the other side. Now we have a what is IMO a wonderful lease property.

Lessons learned? Challenges?

-1/1's are very easy to lease!
-Make your money on the front end of the purchase!

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

I'm an agent myself.