Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $235,000
Finally closed on my first investment property!! House hacking this 3 bed/1 bed side-by-side duplex with plans to remodel and turn into 3/2, increasing cash flow potential.
What made you interested in investing in this type of deal?
Needed a place to live after 2 years of traveling the US in an RV with our family. What's better than a place that gives you some rental income on the side? Can't ask for a better location 1 block to downtown dining and entertainment and 2 blocks from the river, pier, park and beach!
How did you find this deal and how did you negotiate it?
Realtor gave me advanced notice of this property, but still waited for it to hit the MLS, as it took some serious convincing of my wife. Market was so hot in the local area, other offers came in so high in attempt to lock in the deal, and they then attempted to negotiate back down using inspection items as an excuse. Seller hated that approach, so my common sense negotiations worked better, so got somewhat lucky I think. Gave him his price, in turn he addressed all the issues I wanted done.
How did you finance this deal?
Conventional mortgage with 5% down.
How did you add value to the deal?
Plan to remodel both units, larger remodel on the 3 bed side to start, including full new kitchen, bathroom and bedroom floors, plus moving laundry from basement to second floor where beds are. 1 bed side will get remodeled next spring by adding a dormer to convert loft into second bedroom, plus other minor cosmetic updates.
What was the outcome?
TBD...
Considering attempting using it as a short term rental due to it's super convenient proximity to everything. More work/turnover, but likely much more profit knowing this as a seasonal destination area. Can always shift gears and go back to long term rentals if it's too much.
Lessons learned? Challenges?
We likely overpaid, but seller wouldn't budge on price and I was anxious to get something under my belt, so I jumped at this. We lost out on several other deals in our hot market, so we felt we had to give a little. The numbers still work, and will only get better post remodel.
I fully expect I'll run into more challenges and learnings ahead. Stay tuned...
