Investment Info:
Small multi-family (2-4 units) buy & hold investment in Wauwatosa.
Purchase price: $153,000
Cash invested: $43,000
Sale price: $245,000
I Lived in half of this duplex while renovating it myself. Completely gutted and rebuilt kitchen and bathrooms and refinished the hardwood floors. I did everything in this 1929 Bungalow.
I moved out after I got married and rented both upper and lowers for 2 years prior to leaving Milwaukee for Charlotte.
What made you interested in investing in this type of deal?
This was a way to house hack and save up some money by living in the upper and renting out the lower unit. I love the idea of getting someone else to help share the load.
How did you find this deal and how did you negotiate it?
I stumbled on it after a buddy of mine was looking for a place to rent and he knew I was interested in buying a duplex. He started a conversation with an investor who had a for rent sign out in the yard and the investor said that although this house wasn't for sale he had another one that he would sell. I called immediately and negotiated a price over the phone.
How did you finance this deal?
It was traditional lending but I only needed 10% down because it was going to be owner occupied.
How did you add value to the deal?
I completely renovated the 1929 kitchen and bathrooms, refinished hardwood floors under layers of carpet and VCT, and added central air conditioning.
What was the outcome?
I got luck and all of my renters were good. I tried to rent to young professionals like me. Saved up to purchase my first single family home.
Lessons learned? Challenges?
Paying the capital gains tax at the end was not fun and although I knew it was coming it was still hard. I thought at some point it would be good to refinance into a 15 year mortgage but that was a waste of money as I wanted the larger stream of cash flow.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
No, it was a long time ago.
