To keep or not to keep

[William Hanrahan]

Investment Info:

Small multi-family (2-4 units) wholesale investment in Johnstown.

Purchase price: $64,000

Pending removal of current tenant, cleanup/repair/renovation

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

It was my 1st home I purchased back in 2007. The tenants paid my mortgage. Now I purchased a bigger, single family home next to my in-laws and now I own this property free and clear.

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

I walked into my local real estate company (Coldwell Banker) and said I wanted to buy a multi-family home in the area. At the time I was living (renting) a home 3 hours away for my work, with plans on eventually moving back, which I did.

How did you finance this deal?

Owner/occupy for approx. 10 years

How did you add value to the deal?

Expanded the driveway, making room for more off-street parking. I repaired the roof that was long overdue. I did small renovations to both the up and downstairs apartments.

What was the outcome?

My most recent mistake was to "Not view the property as a business" but as a home I just wanted to be lived in. 1st/upstairs couple were great, no issues, paid rent on-time. Then I got strapped for time due to having a 2nd child and let a family move in with the agreement that the dad would finish the trim and any small items that were left. He proved himself worthy when going from 3 ppl living in the home to 8 caused for some sewage drainage issues. Ended up being a collapsed drain pipe.

Lessons learned? Challenges?

I did a small renovation to the downstairs kitchen/bath and rented it out for much lower rent compared to similar rentals. I regrettably rented to people who destroyed the place and now I need to renovate both up & downstairs, have an exterminator come through to get rid of bed bugs. And fix a foundation issue that could potentially cost me thousands to repair.

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

I have worked with Matt Gifford of Coldwell Banker with this property in the past.