Investment Info:
Small multi-family (2-4 units) buy & hold investment in Monroe.
Purchase price: $150,000
Cash invested: $8,000
Bought this 4 unit in January of 2022 to start the year off right! Current gross rents are $1,975 looking to increase that to $2,400-$2,600 and net around $1,000-$1,300mo after all expenses and mortgage pay down. Excited to hold this one for awhile! I am a licensed agent in MI so I was my own agent and got 2.5% commission which covered a good chunk of my out of pocket costs.
What made you interested in investing in this type of deal?
I actually did not originally like the area/market but as a property manager have managed a few properties in the area and started to actually understand the market and realize that it is not all that bad. After seeing some larger multifamily investors start to like the area/marker as well, that gave me the confidence to invest in the area/market also. So I went for it! Love it so far!
How did you find this deal and how did you negotiate it?
I am a licensed real estate agent in the state of MI, I was my own agent in this case. I setup my own showing and submitted my own offer. I offered asking because it seemed like a good deal at that price anyways. Once inspection came around the only thing I asked to be fixed was a leaking pipe in the basement, no concessions, no price deduction, just fix the pipe. The seller agreed and we where both happy and 30 days later shook hands at the closing table!
How did you finance this deal?
I have what I would consider a good friend who works at Flagstar Bank, I have used him in the past as an agent for clients so I reached out and told him I want to get approved this time! He got me approved on a CONV loan at a 3.85% rate and I was happy!
How did you add value to the deal?
I am currently increasing rents and I will soon be renovating a unit to increase the rent by $250-$300. This specific unit is currently $550 and market is $750-$850. (I know this because I just leased out another one bed, smaller Sq.Ft for $850 one block away as a PM)
I will also be adding a $35-$50mo Utility charge to new tenants because I pay the water and gas currently... with how cold Michigan gets my first ever gas bill was just under $400... $250 higher than anticipated...
What was the outcome?
I would say TBD because I am only a few months into this deal but will keep everyone posted who asks!
Lessons learned? Challenges?
I would have to say TBD on this one as well, I am a Property Manager and will be managing my own property and utilizing all the systems we have in place at the company so It took a TON of weight off my shoulder. So the lesson learned is... hire a PM! (Shameless plug)
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Myself as an agent, any investors looking for deals in MI you can contact me. I am also looking to build a team of 30 like minded agents this year and would love to send busines their was well! Or have you join the team! (Another shameless plug)
In all seriousness, always ask for referrals from people who you know and trust in your market.
Propel Property Management! I love helping other owners have a smooth investment experience as well!
