My first investment came on accident

[Steven Tran]

Investment Info:

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

Purchase price: $675,000
Cash invested: $33,750

I purchased a 4plex under FHA, with one unit reserved for my parents. I inherited 3 tenants, and over the past few years, have turned over all three apartments, getting them up to market rates for rent. I've been able to house my parents for free, all while turning a small profit every month.

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

I wasn't actually interested in investing; I just wanted to house my parents. I was set on purchasing my parents a home and just covering their mortgage until one day my sister recommended that I purchase a multifamily unit, so I could offset their living expenses. I was keen on the idea of not paying for their mortgage out of pocket, so that is the direction I looked towards.

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

I contacted a family friend who was a realtor to help us look for multi-family properties. After a few swings and misses on an offer, my agent spoke with the listing agent, who happened to represent a large property management group. They had exactly what we were looking for; a 4plex with an open unit for my parents.

How did you finance this deal?

I took out an FHA at 5% down to purchase this multiplex.

How did you add value to the deal?

This 4plex was built in 1971, and the property management group before had poorly managed it. Rents were well below market, so I was paying initially nearly $1,000 a month to cover the mortgage with the rents. Over time, with leases ending and some unfortunate situations with tenants leaving, I've been able to make substantial repairs myself and get my rents up nearly $700 combined on all three units in less than 2 years of owning the 4plex.

What was the outcome?

I'm still holding the 4plex, but my parents at the moment live completely for free. I'm also taking in a small profit each month, which I put additionally towards the principal.

Lessons learned? Challenges?

With each renovation, I've learned a lot about renovations and general fixes; what would have seemed like insurmountable challenges before are now all skills I can say I have under my belt (flooring, plumbing, electrical, you name it). I've also learned a lot about the art of managing my tenants, working through issues with non-payment, abandonment, eviction, and more recently, COVID.

This also got me interested in investment properties, and I purchased my second 4plex in October 2020.

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

I worked with Phan Hall Property Group, and they have agents licensed in Washington and Oregon. I had such a good experience working with them, that I recently joined their team as a real estate agent as well (licensed in Oregon)! They helped me navigate the investment aspect of my purchase, and as investors themselves, were able to find me the right contractors for all of my major issues.

I would strongly recommend my lender as well, Robert Day from Root Mortgage. Extremely knowledgeable.