6th buy & hold property a 4 unit in Maine

[Carl Hebert]

Investment Info:

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

Purchase price: $205,000
Cash invested: $42,000

4 unit with two 3 bedroom 1 bath and two 1 bedroom 1 bath and a one car garage.

Currently fully rented, collecting $4160 a month gross rent. Don’t have a full year of numbers yet, but expect cash flow to be between $2000-2500 a month. We might get a bit more depending on how the natural gas bill goes next winter.

Will look to rent out the garage for an additional $150-$200 a month.

There are some minor repairs that could total up to $10k. Hot water heater, heat issues, some foundation work needs fixing and a couple other minor items. Overall nothing that seems to scream giant expense yet.

Building was appraised for $225k when we bought it. Nice to start with $20k in equity.

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

Good price and good potential rental numbers.

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

This was an off market deal that was part of a package, but we ended up only buying this one. They wanted $220k we offered $200k settled on $205k

How did you finance this deal?

10 year commercial loan @ 20 year amortization at 4%

How did you add value to the deal?

Raised the rents on the three section 8 tenants to market rent. Also rented out the vacant apartment at market. Gross rents increased from $3600 to $4160.

What was the outcome?

Another solid cash flowing property to the portfolio.

Lessons learned? Challenges?

This one took a long time, but it was almost all on the seller's end. They took forever to get every bit of information needed. Worked in our favor, because they ended up paying two extra months of heat in a Maine winter :)

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

Mike Emmert was my real estate agent on this one.