All Forum Posts by: Joe Fraga

What you're talking about isn't real estate investing. You're essentially giving him a loan. And how are you getting 7%? It sounds like he's going to give you $500 until the $85k is paid back. You're also not taking advantage of ANY of the benefits of real estate investing. Equity, pay down, tax benefits etc. And worst of all theres no way for you to "raise the rent" your money will be stuck there forever. Sounds like a terrible idea.

I have been asking the same question. Interested to see what comments you get.

Sounds like a good idea to me. From my experience having a master bath is a big plus. I could see a 2bd 1 ba but a 3 or 4 bd 1ba sounds very undesirable. Have you rented this property in the past the way it is? 

That sounds a bit high to me but I am also on the other side of the country. I pay 6% for my commercial loans. A lot of it has to do with your credit score. However even with a credit score of 620 you should be able to get a rate of 4.6%. I would talk to at least 3 lenders and see what they say. Print a copy of your credit report and have them use that give you an estimate.

How did you do? Also in Reno here.

Investment Info:

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

Purchase price: $450,000
Cash invested: $24,000

Purchased a 3 plex with an FHA loan. Lived in it for a year, purchased a new home and turned the unit I was living in into a STR. The other 2 units are corporate housing and a residential tenant which more than covers the mortgage so the STR cashflow is free and clear.

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

I made a goal to have 5 doors in 10 years. Multi-family made it possible to achieve this goal in less than 2 years.

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

Found on the MLS and negotiated through the sellers agent.

How did you finance this deal?

$24,000 down and an FHA loan.

How did you add value to the deal?

The 3 plex was under valued as the owner was receiving lower than average rent for the area.

What was the outcome?

I purchased the property, moved in and talked to the tenants I inherited about what they liked and did not like about the old owner. I was able to use their feedback to offer them certain things like being able to have a pet in exchange for a new lease which allowed me to raise the rent immediately.

Lessons learned? Challenges?

There was really no challenges. It has been a well oiled machine pumping out cash since almost day one.

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

I represented myself which was another benefit as I was able to put my commission of 2.5% toward the down payment.