TL:DR - picked up my second 4-family. Purchase price $120k, with maybe $40k in repairs/capex the first year. Looking to get rents to $600/mo and cashflow over $400/mo.
Hey all. This post won't be as organized as my first deal post (https://www.biggerpockets.com/...), but excited to have closed on my second deal.
I started the year doing another 90 day Bigger Pockets Challenge, this was successful for my first deal, but if you all remember the craziness the year started with, the second attempt was unsuccessful. After the 90 days had run their course I kept an eye on the market, but definitely not as closely. However, as that challenge was ending I found investor agent @Alicia Sierra after reading a comment she left on another post that sounded very helpful. She sync'd me up with her partner Jessica Loose and Jessica kept an eye out for me. For like 7 months...
Well, a 4-family hit the market for $150k in a C-level neighborhood that Jessica sent my way. We knew it needed a roof and likely a new lateral line. Rents in the area can easily get $600/mo so I assessed the deal and could offer $128k. Which was promptly declined for another. That fell threw. And then another. That also fell through. And then it finally fell to me. We negotiated to $130k and got it under contract. I think the other deals fell through because the property does need some work and the three current tenants do not speak English (Vietnamese and French speakers), two of which didn't even have leases... Did a walk through with my property manager, Peter MacKercher, and when he said "$130k feels right for this," it gave me a ton of confidence that I had at least assessed the deal pretty well.
This was an "As-is" listing, but the inspection came back with a lot. We expected a lot, so it wasn't a shock, but we needed to negotiate a bit more. After reassessing, we countered at $117k, they countered back at $120k and I figured it wasn't worth arguing over 3k at this point.
Day of closing, Tuesday Oct 11th, my Closing Disclosure changed 4 times... arguments over the prorated rents and utilities with the sellers and the title company apparently got heated...
And now, the deal details.
Purchase price: $120,000
Convention 30-year loan @ 7% with 25% down ($30,000)
Planning $40,000 in repairs the first year or two (roof, lateral, kitchen/bath updates) and possible another $40,000 over the next 10 (more updates, HVAC replacements).
Targeting ~$450/mo in positive cashflow after all units turnover and updates are made (~7% CoC ROI). ~$250/mo in cashflow off the bat.
I also am fairly confident that this property is on the "path of progress" and could see over $700/mo in cashflow in 5-ish years. This may also mean it might be a bit of a "slow burn BRRR" and I can pull some money out to finance a future deal.
Want to thank my agent again, Jessica Loose. She put in a lot of work and had tons of patience to see this though. Highly recommend her to anyone needing an active agent that finds deals and brings them to you.
