1st Multi-family Investment

[Jake Lilly]

Investment Info:

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

Purchase price: $255,000
Cash invested: $52,500

This is a duplex that my wife and I found, and are currently living in while renting out the other half. 3 bed, 2 bath, 2 car attached garage. We found this and began playing around with numbers. Being slightly over 20 years old, it didn't need much work. I knew that if we put the standard 20% down, we'd have a good chunk of equity built up right off the start, and we'd also have enough, or close to enough, rental income from the other unit to cover our mortgage.

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

We wanted to begin covering as much of our monthly expenses as possible with investment income, starting with what our rent payment was each month. This made sense to us because it would enable us to live mortgage free and save more money to invest in more properties. Rental Income brings in $1195/month, and whenever we decide to move out, we will Cashflow about $1150/month, without any improvements to the property.

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

Zillow. The owner was a real estate agent, so negotiating was difficult. However, we made the deal work out and it was close enough to what we were planning on spending for the property.

How did you finance this deal?

Conventional Loan as a primary residence, with 20% down @ fixed 3.125%.

Lessons learned? Challenges?

I could've put less down in order to have more cash available now.

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

Yes. Jim McMillian in Saint Joseph, MO is a great, personable, seasoned real estate agent.