Three Unit Cash Flowing Property in Central PA

[Lake I.]

Investment Info:

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

Purchase price: $100,000
Cash invested: $4,100

Three unit building in an upper C and B class neighborhood. 13% Cap Rate.

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

The terms of the purchase were such that I didn't have to put a lot of cash down. The seller was motivated and I was motivated to buy. Both parties made it work out for the other and it came together perfectly.

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

When discussing real estate investing with a co-worker, he mentioned this investor to me and recommended I contact him. After a long discussion with the investor, he revealed he was selling this property and wanted to make it work.

How did you finance this deal?

Commercial Loan, 80% LTV.

How did you add value to the deal?

The seller wanted out of the property to free up credit for other deals more appealing to him. As someone who was starting out, I did not mind the headaches that the more seasoned investor was looking to avoid.

What was the outcome?

A great deal that gave me a great cash-flowing property.

Lessons learned? Challenges?

I should've requested the rents be raised before signing. Although, I have had no trouble raising them up to market standards.

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

None. We both avoided using realtors as it would cost the seller money.