Scaling up the investment with a 4-plex

[Todd Swalin]

Investment Info:

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

Purchase price: $66,000
Cash invested: $14,000

This 4-plex was fully rented when purchased. It has some maintenance issues that will need to be addressed in the near future but it is cash flowing nicely so far. One tenant moved out giving me the opportunity to fix it up a little and increase rent. In the 6 months I have owned it we have added about $180/month in additional rent because of the improvements and keeping up with market rent.

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

The cash flow on this property was very attractive.

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

I found it off of Zillow. I gave a pretty low offer at first which was denied to find out how low they would go. Then my business partner negotiated the final price.

How did you finance this deal?

Traditional bank financing

How did you add value to the deal?

I manage the property and have done most of the maintenance and repairs.

What was the outcome?

So far it is cash flowing very nicely and all the tenants seem to be happy living there. I am pleased with how it is going so far.

Lessons learned? Challenges?

We had one unit sit open for almost 2 months. It was very tempting to put someone in there just because of the lost income but I waited patiently for a good tenant and I am happy that I did. I learned to not rush into getting a vacancy filled with just anyone but to wait for someone you are happy with that will take care of the property and pay on time.