Investment Info:
Small multi-family (2-4 units) buy & hold investment in Philadelphia.
Purchase price: $260,000
Cash invested: $226,000
We just purchased our 3rd property at the end of January 2020, this is a single-family house that my partner and I are converting into a duplex. The plan is to live in one unit and rent out the other for a house hack.
What made you interested in investing in this type of deal?
We've wanted to get into multifamily properties and this was a great option.
How did you find this deal and how did you negotiate it?
Our realtor brought it to us, we negotiated $20k off of the asking price with max (6%) seller assist.
How did you finance this deal?
FHA 203k loan
How did you add value to the deal?
We're currently going through the rehab, a full gut renovation which includes adding livable square footage to the basement and converting the top two floors into their own separate unit with separate utilities
What was the outcome?
To be determined but we're aiming for a $600+ ARV.
Lessons learned? Challenges?
The entire 203k process was a serious challenge especially with the project requiring a larger rehab budget. We had to hire an architect, HUD consultant, Lawyer and negotiate with an older, stubborn seller. We learned the importance of setting boundaries that aren't crossed and expectations throughout the process. This project also showed us the importance of having a clear vision and goal and seeing it through to the end.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
We worked with a number of professionals to pull the purchase off but I would definitely recommend our lender to anyone in the area thinking about a 203k loan. We went with Movement Mortgage.
