Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $245,000
Cash invested: $8,000
This is my first rental property, and it's located in St. Paul, Minnesota. It's a triplex with an over under and a small cottage house on one lot. I was able to get the property with owner financing through my landlord that I met when he bought the apartment building I was living at previously. My wife and I are going to house hack this property and save for our next multifamily.
What made you interested in investing in this type of deal?
I have wanted to get into rentals for the last 5 years, and just got stuck on reading/research. I decided on multifamily buy and hold because of what I've learned over the years. It was BP that pushed me to start looking for deals and telling everyone that would listen about my dreams and goal. So many podcasts talk about how people dont get started because they are nervous or scared of failing so they dont take a risk and buy that good deal that comes along. This fact is why we went for it.
How did you find this deal and how did you negotiate it?
I met the owner when he was looking to buy the 15 unit apartment building I was living at. He's close to my age, and when he came in to look at my unit instead of just sitting there I started shooting questions at him, and told him this is what I want to start doing some time in the near future. This started a relationship, and he became my mentor/friend. So when he was selling his triplex that was further out then he liked I was the first person he came to.
How did you finance this deal?
I had been sitting on the down payment for almost 2 years just not ready to fully commit. I wasn't sure that I could go right out and get a bank mortgage so we wrote up an agreement to do owner financing with the option for a balloon payment once I can get a traditional FHA mortgage.
How did you add value to the deal?
I'm currently living in one of the units and our first project is to repaint the cabinets and struce up the kitchen and then we will be remodeling the bathroom next. It could use knew tile and fixtures. The other units will be worked on as the tenants move out.
What was the outcome?
The outcome has been amazing so far. Like I said earlier this is our first rental, and we just moved in so there will be challenges, but the wife and I are in this together and with hard work and determination I know we will make this work. I forget what podcast it was on BP, but the guest said, "this is going to work because I'm going to make it work" and that has really stuck with me.
Lessons learned? Challenges?
So far the biggest lesson learned was that I waited way to long to start. You really have to make that voice in your saying, "what if you fail" shut up and just believe in yourself and believe in your team (my wife) and trust that you will make this work.
