All Forum Posts by: Adam Hughes

Investment Info:

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

Purchase price: $182,500
Cash invested: $1,000

I was able to use equity in another property to buy this duplex and another duplex across the block from this property. These were our 2nd and 3rd investment properties and part of 5 doors we bought in 2020. These will be buy and hold properties with a goal of refinancing and raising rents over the next 5 years to get them cash flowing at least $500 per door.

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

I had the equity in a farm that I bought and decided to use that as a way to accelerate my real estate investing. This was a package deal of 2 duplexes on the same block that were both built in 2005. These units fit my investment strategy well. They are newer so capital and operating expenses should remain low. In addition, I thought the previous owner did not manage well and there was room to raise rents by $100 per month, though not immediately.

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

Found the deal on realtor, knew it fit my model, and I made an offer after the units were on realtor for about 12 hours. Worked in to the offer that I didn't need to see the units until we had a contract which the seller loved because we did not have bother the tenants unnecessarily. Asking was $350,000 and I got it for $335,000.

How did you finance this deal?

Portfolio loan with a local bank and no money down due to equity in another property.

How did you add value to the deal?

Able to raise rents on one of the units right away.

Lessons learned? Challenges?

Don't trust the seller and read your closing statement. I'll save the long story for another time.

My partners and I are working on obtaining our first property that includes the opportunity to develop two additional lots zoned 1-4 family. Location is in Southern Illinois in a small college town. We’ve not developed our own properties yet but we have confidence in our knowledge, ability, and relationships. Looking for advice on bank financing for the development vs exploring private lending vs bringing on another equity partner. Also open to other ideas.

Here are some numbers:

Properties Include: 5 yr old triplex, duplex, and two lots next to the triplex.

Negotiating Contract: 450k - 500k for the package.

5 plex rents = 3500

Duplex rents = 1600

Construction Cost per 4 plex = 300k

Rent per 4 plex = 3k

Biggest concerns/questions:

Rural community but holds the county seat.

College town and unsure how long COVID will impact these smaller schools.

Construction materials are high currently, should we wait to build?

How do we best finance the development?

Looking forward to hearing pointers, advice, etc!

Thanks

@Jennifer Donley I live in the St Louis Region and looking to get in to STL soon. Currently my investments are in the Metro East. If you look to sell again, I’d be interested in looking at what you have! Thanks!

Investment Info:

Single-family residence buy & hold investment in Pontoon Beach.

Purchase price: $78,000
Cash invested: $3,000

Bought this property and house hacked by adding roomates while still in college. Got married eventually and moved out. Have had the same renter in the house since 2012.

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

Really it was an accident, but I liked the idea of not having to pay out of pocket for my mortgage.

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

Through a realtor and offered 70k when it was listed for 90k.

How did you finance this deal?

FHA 30 year.

How did you add value to the deal?

Have redone the roof, siding, flooring, paint, added a fence, and upgraded the HVAC system.

What was the outcome?

I get $850 per month on the house.

Lessons learned? Challenges?

Didn't do a great job of managing it like a business, and let the tenants get away with some small stuff. I look at it now and realize I've been lucky but have since mitigated that risk by treating this as a business.

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

Not really.

Starting my journey at 34 yrs old and I've set a goal of 50 doors, by 50 YO, $500/door/mo CF, and $5,000,000 value. I own 1 SFR and have 2 duplexes under contract right now. Tell me your success stories and what helped you? I've studied the numbers, read the books, etc. Just looking for motivating stories!

I waited and 12 years later I'm buying 2 duplexes. It was only 12 years though! You can probably guess, but my advice is don't do what I did. Find a property that works for you, live in it for a year or maybe 2, and move on to your next one. . 

Best of luck!

@Jake Arnold look for another duplex, triplex, or quad. Buy it owner occupied and rent out the rest. Save up the cash for a year and do it again. DONT WAIT! I waited 12 years to buy my next rental and I’m 34 now. My biggest regret was not goi g all in back then. By the time you’re 30 that 22.54/hour will be 100x. Just go all in.

@Amber Tippett, I’m buying my second property, by the end of the month. The first was on accident and it’s been 9 years ago that I purchased it. Here is why I’ll be buying my second and third this year with a goal of 50 units over the next 7years, I read a lot of books, study the financials, and put in some guidelines. Point being, just make sure you know what you’re doing (read, study, implement) and you’ll be a rockstar. The home equity will only be he start.

Good luck!

@Frankie Woods

If you don’t mind me asking, what type of property in Belleville? I’ve been a little timid of Belleville with no real reason other than I don’t know it as well.

Do you manage yourself or use a PM?

Thanks!

@Denny Robert

I’m in Troy,IL and also went to SIUE. Great to see so many others from the area investing.