Second / Third property..... an interesting but worth while deal

[Barbara Wilson-Scranton]

Investment Info:

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

Cash invested: $45,000

My Brother inherited the house. He walked away I finished paying off the mortgage. I have it rented out but it needs work for me make its full potential. He let it go. It has a grandmothers addition in the back yard that my husband and I will be turning into our 3rd door. Lots of work but will all be worth it in the end, especially if I can make it cash flow enough to pull the equity (with no mortgage) and use that as the down payment for an additional set of doors. Our focus is on multi family homes.

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

Same as my previous post. However, I guess that at some point I should mention, my husbands father and family line is full of real-estate agents and since hitting an age his father has become an investor and is financially free. Its a long story, and he is very old school. I am learning from him but very much want to take it to the next level.

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

My brother walked away, and therefore pissed away opportunities handed to him.

How did you finance this deal?

I have had to pull the equity from our other property to finance the needed repairs. The repairs needed mean that I can not insure the property (outside of liability) until fixed. So a loan is not an option. It is a strong house with lots of potential, and good bones. It just needs some TLC.

How did you add value to the deal?

We are replacing the roof and turning the grandmothers addition into an ADU. Double the rent for a much bigger ROI.

What was the outcome?

This is a work in progess.

Lessons learned? Challenges?

Doing business with family can sometimes suck but can also have its perks. My brother, though mostly irresponsible, is very handy and do a large amount of the general repairs and maintenance that will be needed on our investments at a fraction of the cost. This does not mean that others will not be called and paid for their services on the bigger more important repairs.