Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $500,000
Cash invested: $115,000
Duplex is a two 2-bedroom/1-bathroom side by side home.
What made you interested in investing in this type of deal?
The home was in a great area and close to a walking trail. It was also already renovated so we wouldn't have to deal with fixing it and could keep the capital that we would have had to use to fix a home on another project.
How did you find this deal and how did you negotiate it?
This was an off market property brought to me by my agent at the time.
How did you finance this deal?
I used a conventional loan to purchase as an investment property.
How did you add value to the deal?
I furnished the home and listed it for short term rent.
What was the outcome?
Still in the early stages but things are improving. We plan to do STR with this property for as long as we are able to. Ideally that time frame would be at minimum 3-5 years. At that point, we could get a much more detailed picture of the performance of this home. I project to break even on my ROI in 2-3 years.
Lessons learned? Challenges?
With STR laws and regulations constantly changing, I don't like to leave all my eggs in a basket. I would suggest to anyone starting out trying to do something similar to make sure you have a plan B in case you can no longer do STR. In addition to that, do not use only one year's gross income to estimate future income because the subsequent years could be different. It is better to average out a few years to get a better gauge of income and costs.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes, this home was an off market deal purchased through a realtor.
