Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $175,000
Cash invested: $25,000
The perfect house hack property - 1 'master unit' has 2beds, 1.5 baths, front porch/main entry, and separation from the other 3 units (stacked 1bed units with identical layouts, added-on to the original house) so you can't hear or smell the other tenants. Shared coin laundry in basement.
What made you interested in investing in this type of deal?
I wanted to house hack a 2-4 unit multifamily in this neighborhood and this seemed like just the right property for it.
How did you find this deal and how did you negotiate it?
A friend/mentor and fellow real estate agent/investor brought me the deal after selling me a similar multifamily nearby. He represented the seller as the listing agent and I represented myself as the buyer's agent.
How did you finance this deal?
Seller finance with $25k down payment on $175k purchase price. Down payment funds borrowed against other rental properties.
How did you add value to the deal?
Tenant turnover, light interior paint/drywall/ceiling work, very light landscaping. It has room for more value add: build out storage and/or living space in basement- possibly another unit, refinish or cover old wood floors, and build a garage/ADU in the rear of the property.
What was the outcome?
Still own the property, getting ready to refinance out of my contract with the seller.
Lessons learned? Challenges?
I loved that the property came with tenants, meaning it came with a valid rental permit and cash flow from day one. BUT the biggest lesson I learned is to independently vet the existing tenants, and verify their deposits or lack thereof! Make sure seller, tenant, and you (the buyer) are all on the same page about how much deposit is on file with the seller to be transferred to you at closing. If the tenant and owner disagree, have them resolve it between them & sign docs as part of closing!
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I represented myself as my own buyer's agent on the deal and recommend you have me represent you too! As a buyer, you rarely ever have to pay your agent's commission out of your pocket - the seller pays their listing agent's commission from the sale proceeds, which is then typically shared with the buyer's agent. So I got paid by the seller to buy the 4plex from him! You can have the seller pay your agent on your acquisition too!
