Investment Info:
Small multi-family (2-4 units) buy & hold investment in Chambersburg.
Purchase price: $87,000
Cash invested: $21,750
Duplex with two 1br units. Tenants pay all utilities. Each rented for 650$ month. Total income 1300$ Monthly.
What made you interested in investing in this type of deal?
Biggerpockets Calculators and analyzing enough deals that way led me to go by the 1.5% rule. Rents must be 1.5% of purchase price in order to cash flow. Multi-families have several revenue streams rather than one. Finding properties with few owner operator costs (utilities).
How did you find this deal and how did you negotiate it?
Found it on MLS with a my PA realtor. Set up a showing and found it was mostly turnkey. Asking price was 99,900$, market rent should be 1300$ income, 1.5% rule says purchase price should be 87,000$. Made the offer and it was accepted.
How did you finance this deal?
Traditional bank lending, 25% down, 4.875% interest over 30 years. Financed down payment and closing costs with getting a note on my truck at 4.59% interest over 6yrs.
How did you add value to the deal?
I'll spend 1000-2000 on fixing an exterior flight of stairs and purchasing some appliances.
What was the outcome?
Working on finding HELOC lender for investment properties to pull out equity to finance next deal.
Lessons learned? Challenges?
Bank lending is slow.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Charlie Miller @ Freedom Mortgage Gaithersburg, MD and Nancy Allison @ Coldwell Banker Chambersburg, PA and Jennifer Marten Antietam Realty and Property Management in Waynesboro, PA and David Engel with Tower Hill Realty in Gaithersburg, MD and Lee Marsteller with Cole Group in Potomac, MD and DC
