Investment Info:
Small multi-family (2-4 units) buy & hold investment in Newark.
Purchase price: $370,000
Cash invested: $12,000
Its a lovely 4-unit with good bones. I will be adding some value-add repairs to update the kitchens and bathrooms, but other wise all units are in pretty good shape. This is just about as turnkey as I could find within my budget. Each floor contains 3 bedroom 1 bath with wood flooring and lots of storage. It even has decent backyard which I plan to make it look spectacular over the next few months because I love outdoor living spaces.
What made you interested in investing in this type of deal?
I bought this as a house-hack after buying the "Rental Property Investing" book by Brandon Turner. After reading that book and listening to Brandon talk about house hacking over and over again to the point that even his house in Maui is a million dollar house-hack I figured this will be the best way to dive into real estate. Not to mention I wanted to knock down my most expensive expense which is my living expenses. When all 3 units are rented I should be living for free, GOAL ACCOMPLISHED!!
How did you find this deal and how did you negotiate it?
I am an agent so I was able to find this on the MLS. As an agent I abide by the "Early Bird Gets The Worm" theory and was able to put in an offer on this house just 20 mins after it was posted to the MLS. In New Jersey where I practice the Multi-Family market is really cut throat. Investors are hungry out here so you have to be especially motivated to snag a Multi like this one. I offered exactly asking price because I wanted zero issues. However I must say this is like 20th offer I had put in.
How did you finance this deal?
I will be using a FHA 201k loan (A pain in the neck, but worth it!).
How did you add value to the deal?
The house definitely needed some repairs to some of the units. So I will be adding new kitchen cabinets and countertops, as well as new roof, fresh coat of paint, little bit of landscaping for the back yard. Basically my goal is to modernize this building to bring this home back to its glory days.
What was the outcome?
The outcome is still yet to be determined. However I will update you when things are in full swing.
Lessons learned? Challenges?
The lesson I learned is that in upper New Jersey if you want to get into a Multi-Family its definitely possible. You may have to be diligent and consistent but eventually with enough offers out there 1 will stick. I also learned that achieving my goals of living for free is certainly possible but you definitely cannot skip any steps. I had spent 5 years learning about how to invest in multi-families before I was able to do it myself. But Its also not as hard as it may seem, just build a team!
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Since I'm an agent on this deal I did need to hire an agent; however I definitely would like to give special thanks to my Team; Mark Calicco who is my lender from Guaranteed Rate he definitely helped me every step of the way on this deal, Lori Golia My Lawyer who understood my needs and helped hold this deal down, Tom Olivo who is my inspector on this deal, and Erick Zackarski my contractor on this deal who helped my appropriately analyze my rehab costs on this deal.
