Jumpin' in to our first Investment property in a hot market.

[Austin Carroll]

Investment Info:

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

Purchase price: $212,000
Cash invested: $11,000

I purchased a 4-plex outside of Edinburg Texas for my family and I to live in as a house hack. We are currently located in Central Oregon, but will be living in Edinburg for at least a year, maybe longer. This is our first Investment property.

9.5% Cap rate
14% Cash on cash return while paying property management

NOI: $1,710 Including Management

These are the projected amounts based on a $600 a month rent.

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

I have been wanting to house hack for several years. It seems like a great way to build momentum with real estate investing. My intention was always to do it here in Oregon, but I am able to work remotely, and we were pushed out of the market in the Bend Oregon area. I decided to look into other markets to invest. My wife is an Ecuadorian immigrant, and we speak Spanish at home. So, when I stumbled across the Rio Grande Valley it seemed like a wonderful fit for our family. Plus I love tacos.

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

My agent Miguel Vargas located in Mission Texas found it when driving past a different property with a for sale by owner sign out front. He called the owner and asked if he had any other properties for sale. The owner had several properties for sale, but this one fit the bill pretty perfectly for what I was looking for. So, my realtor presented it to me at the price decided by the owner and I accepted. There was $1000 in earnest and a $100 option fee.

How did you finance this deal?

I financed the deal with a mortgage company. Mann Mortgage. I used an FHA loan. My down payment and closing costs came out to around $10,000.

How did you add value to the deal?

I can add value to the deal by raising the rents that the previous owner had been neglecting, and by updating some things and cleaning everything up. The current monthly rent is $500 per unit. The previous owner hadn't raised the rent in 5 years or so. The monthly cashflow is the projected amount after a year when the 4 units are renting for $600 a unit. The neighborhood has some identical 4-plexes on it that are currently renting between $600-$650.

What was the outcome?

We'll see.

Lessons learned? Challenges?

I have learned an unbelievable amount already. I honestly can't even begin to list the challenges and things learned here because there's not enough room to type it all. As it is our first home purchase ever, and it was out of state, there have been a number of challenges and lessons. But that's all part of the fun. Isn't it?

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

Yes absolutely. My agent and my lender were both awesome. And my property manager has been great so far as well.

My agent: Miguel Angel Vargas located in Mission Texas

My lender: Mann Mortgage

My Property Manager: Accel Property Management in Mcallen.