Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $152,000
Cash invested: $40,000
First foray into real estate investing (if you don't count the failed building project)
What made you interested in investing in this type of deal?
The market was going up and I wanted to have assets that could appreciate while tenants payed the mortgage with the hope that I could make it profitable or sell if failing profitability.
How did you find this deal and how did you negotiate it?
I found it on Redfin and paid the asking price with the hope that I could raise rent or sell it if things went south.
How did you finance this deal?
Conventional financing 25% down.
How did you add value to the deal?
I removed a bad tenant and fixed up the bottom unit. The market has risen at the same time so that a bland purchase without too much analysis looks pretty good at this point. The main thing that kept the duplex from selling was the hoarder tenant.
What was the outcome?
Its making money, I dont know how much exactly as there are still likely repairs but I make $1600 a month in rent and pay $600 for the mortgage as well as about $200 per month for Insurance and taxes. The hard part is factoring in the repair costs that I had to pay last year after removing the bad tenant ($7000)
Lessons learned? Challenges?
Good tenants are gold, bad tenants are the plague. I hate comfort animals and the vagaries that still exist ( to my understanding at least) around their status and protection under the ADA.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes, I worked with a real estate agent and a lender that came recommended by that agent.
My lender is Guild Mortgage, they are not bad but they are not the best at communicating either, you would think a phone call or an email would be something plausible when a problem arises but that is too much to ask, snail mail is all you will get and if they have the wrong address on file... you get the idea.
