First Deal Success at 19

[Kyle Kerekes]

Investment Info:

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

Purchase price: $250,000
Cash invested: $52,000
Sale price: $285,000

As freshmen in college, my best friend and I were able to acquire a distressed duplex that was rented to students at the University of Scranton.

Through active hands-on management and several upgrades inside and outside the building, we were able to keep the property leased and cashflow positive and eventually sold for a profit two years later at the end of our junior year.

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

At the time we were admittedly most interested in the cashflow seen in the student housing market.

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

I found the listing on Craigslist. We went for a walkthrough and began the negotiation in-person, but we eventually settled the deal a few weeks later over the phone and met in person to get it signed.

How did you finance this deal?

30-year fixed mortgage from a local bank - 20% down payment.

How did you add value to the deal?

Foundation repair
Electrical upgrades
Boiler system replacement
In-unit washer/dryer added
Paint
Secured future leases

What was the outcome?

We held for 2 years and sold to an out of town investor for a profit.

Lessons learned? Challenges?

Everything usually takes longer and is more difficult than you originally think.

Have a few local tradesmen in your contacts - you WILL need them.

Work with professionals - they make the process so much easier!

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

A local agent, Kate Daye with ERA Realty, sold the property for us and made the whole process a piece of cake. I can't recommend her enough, since she's an investor herself she knows exactly what is needed to make deals happen.