Bought 6 apartments with my Solo 401k Trust

[Emily Fackler]

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $180,000

I purchased 3 Duplex (6 doors) apartment using my Solo 401k Trust in full after leaving my corporate job of 11 years. I contributed a lot to my 401k over the years and it paid off! :)

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

I have been looking for apartments for a while. I like the idea of a BRRRR apartment complex. It allows for cash flow and appreciation. It also helps my goal of financial freedom at a young age.

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

My lender sent me this deal as a lead. I negotiated it by getting to know the owner and finding out what his needs were. He wanted 225,000 for the apartments (per appraisal), but I was able to buy at 180,000.

How did you finance this deal?

Through my Solo 401k Trust.

How did you add value to the deal?

The property needed two new roofs and some attention on the landscape. It also needed a few updates here and there (toilets replaced, lining under house to prevent mold). It was also renting for $375 which is about $200 under the market value in this area. The owner had not raised the rent in years.

Lessons learned? Challenges?

I learned to really listen to your sellers. There is a lot to learn. I took advice from the book, "How to negotiate real estate" from the BiggerPockets library and it really helped. Listen, Listen, Listen to the buyers' needs and reasons for selling.

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

I worked with Sense Financial (Dmitriy Fomichenko on BP) and Solera Bank