$215K down to $198 but all CASH!

[Jesse Flores]

Investment Info:

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

Purchase price: $198,000
Cash invested: $198,000
Sale price: $215,000

Duplex built in 2008. $215,000. Currently both units occupied at $750 a month.

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

Harlingen is growing and properties are going for sky high prices (for the area). I know in a few years I will be able to raise the rent the value of the duplex will have increased by at least 10 - 30 %. I'd say that is a nice return.

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

Rental agent.

How did you finance this deal?

All cash. No financing just yet but I will in a few years.

Lessons learned? Challenges?

Need to start looking for properties that are a value, upgrade them and then hold as rentals.

[Brian Simpson]

I think you should consider your risk. You put up or risked 198k to make 1500/mo and you are hoping that prices continue to rise. What happens if the government decides to place a moratorium on evictions or caps the allowable acrual of properties? There are a million other things that can happen that are less far fetched. The renter burns the property down and the smoke detector wasn't found.
  Finally, I purchased a property for 65k that has already rented for $1200/mo and will spend maybe 10k out of pocket to get it done. If any of the things happen discussed above I'm out $10K. How do you like your deal now? I have numerous properties in the valley and I assure you I can find others like the one described above. I found it driving by it to get to another property that I was finishing a remodel on. I don't think anybody wants to stomp on your success least of all me. I would however like to point out that there are many points to consider but the primary thing to remember Is you make your money when you buy the property. That phrase needs to be in bold print and repeated often.  Goodluck