Investment Info:
Small multi-family (2-4 units) buy & hold investment in Anchorage.
Purchase price: $310,000
Cash invested: $25,000
This was our first investment property. This four plex was a HUD home and had been vacant for some time. We used a HELOC from a condo my wife owned outright for the down payment and to help with some repairs. We financed it using a FHA 203K loan, which only required 3.5% down. We lived in for a year rent free. A year and some months later, we bought a duplex using seller financing.
What made you interested in investing in this type of deal?
It was a great opportunity to maximize the use of a FHA loan with a low down payment and using 203k option to improve the property.
How did you find this deal and how did you negotiate it?
Found it on the HUD home listings. My agent put in our bid and it was accepted.
How did you finance this deal?
203k FHA Loan
How did you add value to the deal?
Remodeled it and got renters in place.
What was the outcome?
We have held it for the last four years. It is a great little property.
Lessons learned? Challenges?
Get everything in writing when it comes to contractors. Don't assume anything. Make sure your contractor does not paint the property before you actually close. We were out of town when the property closed and the painter had assumed it had closed so they painted it. We almost lost the deal because of this.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I used an agent to purchase the property and a mortgage broker. Love our realtor, Jesse Knight, who helped us with multiple deals in Alaska.
