1st Multifamily unit Purchase

[Kirk Johansen]

Investment Info:

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

Purchase price: $280,000
Cash invested: $70,000

4 plex comprising of 2x 3br/2ba and 2x 2/1ba.

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

Trying to diversify my investment portfolio.

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

Found on the MLS. Offered $285,000 but when the appraisal came back at $280,000 we were able to negotiate down.

How did you finance this deal?

Standard financing with 25% down.

How did you add value to the deal?

The 2 3br/2ba were renting at the same price as the 2br/1ba. As tenants moved out increased to appropriate rates for the area. One of the tenants renewed so their rent was increased slightly to get closer to appropriate rent.

Lessons learned? Challenges?

Don't always trust that a seller actually completed the things requested. Asked for the HVAC units to be serviced before closing. 6 weeks after closing one of the units died. Pictures taken show that there was a pretty significant layer of dust all over the inside of the unit. Not indicative of something that was just serviced. Company that "serviced" the unit wouldn't warranty the work so I had to pay to replace the HVAC.

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

Claudia Trainum w/ All City Real Estate