All Forum Posts by: Landon Fillmore

Hey Tristian, are you still looking into starting an arbitrage in Anchorage? I have a unit I’d consider renting out to an arbitrage operator if you’d be interested in talking more about it. Message me! I also DMd you on Instagram after seeing this post. 

Hey Glenn! You're getting started in a great place. Anchorage has lots of small multi family to choose from. I have a fourplex in Midtown that does well. I bought it using an FHA loan.

One of your first steps would be to find an agent familiar with the area and investing. There’s a great group of guys who run the local real estate investing meet ups here in Anchorage that would be great to work with. Vested AK, with @Jamie Rose, @Nick Bruckner, and @Tyler Cobb. I highly recommend working with these guys. They’ll help you get started. 

Feel free to DM if you want to talk some more! I love talking about the Anchorage market. Lots of potential here for investors. 🤘🏼

Investment Info:

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

Purchase price: $675,000
Cash invested: $23,625

This 4-plex has townhouse style units which is ideal since tenants don’t live above or below each other.

I bought it in September of 2021 sight-unseen. I was at an Army training in Texas at the time and I had been monitoring small multi-family properties on the MLS daily since I knew I'd be moving to Alaska to be stationed at JBER. This property hit the market, and the next day we submitted an offer. I had an amazing agent who was my boots on the ground and I paid for a thorough inspection.

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

I loved that you can use a low down payment loan program like FHA to owner occupy up to 4-units right off the bat! It seemed like a great way to get started.

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

It was listed on the MLS, and we submitted an offer over asking price. The market was hot at the time and interest rates were low! 2.99%. I had MLS alerts from my agent set up for my buy box of 2-4 units in Anchorage. I didn't care what the price was as long as the cash flow made the deal work, and I could afford the down payment.

How did you finance this deal?

FHA Loan and my own cash as down payment and closing.

How did you add value to the deal?

The unit we moved into needed some updates, so we put new LVP and carpet throughout and updated the bathrooms. We also painted the entire unit. Total renovations on that unit were around $9,000 and we funded it off the cash flow of the other units.

There was also room for rent increases. It was rented at ~$1500 per unit, and I’ve brought it up to market rates of ~$1800. That’s an annual increase of $14,400 in gross rental income!

What was the outcome?

The units all look great! Not granite countertops or anything, but they’re in great shape and the tenants love where they live. I had 70+ inquiries on my last vacancy listing, and that was priced at $1800. I have one unit by the bedroom that’s even higher.

Lessons learned? Challenges?

Alaska presents some unique challenges with the intense winters. Paying for annual boiler inspections and having professionals do the heating and plumbing work ensures I don’t mess something up and cause heating issues the winter. Besides maintenance on a 1972 building, I haven’t had too many challenges! Just normal landlord things.

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

I worked with Patricia O’Neil with Keller Williams, who’s based out of Wasilla, AK but helps buyers and sellers anywhere from Anchorage to the Valley.

Investment Info:

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

Purchase price: $675,000
Cash invested: $23,625

This 4-plex is located in Midtown Anchorage just off Tudor Rd and C Street. It’s in a culdesac of 5-6 other 4-plex buildings. It has townhouse style units, meaning the kitchen and living room are on the main floor, with bedrooms above, which is ideal since tenants don’t live above or below each other.

I bought it in September of 2021 sight-unseen. I was at an Army training in Texas at the time and I had been monitoring small multi-family properties on the MLS daily since I knew I'd be moving to Alaska to be stationed at JBER. This property hit the market, and the next day we submitted an offer. I had an amazing agent (Patricia O'Neil with Keller Williams) who was my boots on the ground and I paid for a thorough inspection.

It was listed for $645,000 and we paid $675,000. Seller helped with some closing costs, and I did an FHA loan 3.5% down payment at a 2.99% interest rate at the time. I used FHA so I could save my full VA entitlement for future properties after I occupied the 4-plex for a year.

We lived in one unit, spruced it up, then moved out and rented it by the bedroom to college students. I have a mix of 2 long-term family units, one unit is rented to a corporate company and is fully furnished, and the last unit is the by the bedroom college student unit.

I've had some repairs to make over the past year or so of owning it, but it's been a great first property and goes to show that rookies can house hack a small multi-family to get started in REI!

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

I loved that you can use a low down payment loan program like FHA to owner occupy up to 4-units right off the bat!

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

It was listed on the MLS, and we submitted an offer over asking price. The market was hot at the time and interest rates were low! 2.99%.

How did you finance this deal?

FHA Loan and my own cash as down payment and closing.

How did you add value to the deal?

The unit we moved into needed some updates, so we put new LVP and carpet throughout and updated the bathrooms. We also painted the entire unit. Total renovations on that unit were around $9,000 and we funded it off the cash flow of the other units.

Lessons learned? Challenges?

Alaska presents some unique challenges with the intense winters. Paying for annual boiler inspections and having professionals do the heating and plumbing work ensures I don’t mess something up and cause heating issues the winter. Besides maintenance on a 1972 building, I haven’t had too many challenges! Just normal landlord things.

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

I worked with Patricia O’Neil with Keller Williams, who’s based out of Wasilla, AK but helps buyers and sellers anywhere from Anchorage to the Valley.

Obviously BP is a good start, since you may have two right here! I’m planning on converting one of my long term units into short term and would love to talk more since I won’t live in Alaska for more than another year or two. 

Additionally, you could run a FB ad or Google ad campaign. I’ve never run one personally, but I’ve found local contractors for renovations through FB ads who I ended up doing business with, so they have some viability! Another option may be contacting other current management companies (your competition technically…) and see if any of them are overbooked or too busy with their portfolio and would want to downsize? Maybe? There’s lots of helpful people out there outside of the BP community, of course!

Quote from @Nick Bruckner:

Check this out! HUGE opportunity in the Municipality of Anchorage as the Assembly  voted last week to change several regulations on what homeowners can do with properties zoned as single family. The changes created more options for Additional Dwelling Units- which can be detached from the home (a back yard cabin). This will open lots of doors for folks in the BP community here. 

Highlights from the Anchorage Daily News article published February 3, 2023:
The rules take effect Feb. 7. In addition to removing the owner-occupancy requirement, other stipulations include:

• Allowing a single ADU to be built on any parcel with a dwelling unit, including near duplexes, triplexes or even apartment complexes. They were previously limited to lots with a single-family dwellings.

• Changing the maximum size cap to 1,200 square feet, although zoning limits retained by the Assembly will help ensure that many ADUs will still be capped at the old limit of 900 feet, city officials say.

• Keeping the maximum height at 25 feet for units in the Anchorage Bowl, except those above garages, which can now reach 30 feet.

However, there are no restrictions on whether the units can become short-term rentals. The Assembly plans to soon tackle short-term rentals as a separate issue, which could include the first limits on their numbers or other new requirements.

Here is a link to the article

I spend a lot of time as an agent looking at home with ADU/MIL/Air BNB potential for clients but now there are many more options especially for properties with larger lots. Exciting time to work and invest in Alaska!

Curious to hear people’s thoughts on this article and what doors it might open!

Just another reason Anchorage is such an awesome market to invest in! Rules and regulations continue to be favorable for investors. Sounds like potential changes to short term rentals are on the horizon though, so now may be a good time to start one if people haven’t already to be grandfathered on possible new restrictions.

This is a great post! I've had my eye on Girdwood since arriving in Alaska for the Army as a great place for an investment property. It seems like seller finance/creative financing would be key down there since listings on the MLS in Girdwood are so rare.

I understand that a huge advantage of multifamily properties (meaning 5-unit and up, commercial apartments, etc.) is that as you increase the revenue and net operating income, you subsequently increase the property’s value.

BUT, my question is about 4-unit properties and below. I own a 4-plex that I bought in September of 2021. Each 3 bedroom unit was rented for roughly $1500 each (so about $6000 gross rental income/month)… I knew this was under market rates for my area, and over the next year or so and with a few tenant turn overs, I now have a gross monthly rental income of $7200. I can increase that to $7500 soon after one more unit is brought up to market.

So, my question is, have I actually increased the value? Will I be able to potentially sell it for more, simply because I’ve made it more profitable? Or is small multi family strictly based on comps during the appraisal process, and other local market variables?

Hey man! Great idea. I am a 2LT, active duty MSC Officer in the Army at my first duty station here in Alaska. I house-hacked a four plex for my first year and just bought a SFH for my second property that I'm doing an Air BNB out of the basement. I'd love to chat sometime about the process!

@Chris S.

Thanks Chris! You've been helpful so far in the process, and appreciate some referrals. It'd be great to meet you sometime and discuss things further.