Closing on my first 4-plex TODAY!

41 Replies

Hey everyone! 

No one else seems to care about my excitement so i thought i'd share it here!!! I'm so excited to be closing on my first "intentional" (i became an accidental landlord with a townhouse in Virginia) rental property today!! A 4-plex in Cedar Rapids, IA... i attached a picture below! I picked it up at 113k, with an interest rate of 4.650 (total loan balance of 90k). The seller is also giving me 3k at closing for cosmetic repairs. The units are 2 bedroom, 1 bath. It currently has one vacancy. I have some outside work to do on it (i.e. siding replacement and landscaping, redo the balconies) and simultaneously "flipping" the vacant unit (new carpet & linoleum, new paint, new counter-tops, new A/C unit). The units rent for 495 each, but after the flipping I'm upping the rent to about 560-595, depending on what the market will allow. 

My husband and I will be managing the property ourselves, so any hacks or tips you can help me out with would be GREATLY appreciated!  Hope you all have a great day :).

I love to see people doing acquisitions in Virginia! Congrats :)

JV

This is a great looking property. Congrats on the purchase. Ensure your finances are in good order. Track everything (repairs, fees, travel, advertising etc). It'll help you with taxes and doing trend analysis to see what your net profit is. Also, if you're not in a bind for cash take your sweet time picking the right tenant. Choosing the right tenant translates directly to profit margins. Enjoy!

Congratulations! Looks like a great acquisition! If "no one else seems to care about your excitement", surround yourself with those who do! Join a local REI group too. Don't be discouraged by nay sayers and those who are indifferent. Follow your passion!

Being new to landlording, you will need some good tools. Set good rental criteria and screen well. Use a comprehensive rental agreement and hold tenants accountable. Address problems swiftly when they arise. Look at some of the BP posts about acquiring property with tenants in place. Also, check out the resources available to you on the BP website. Take a look at the Tenant Screening/Interview questions I contributed under Resources:File Place:Other Documents. All the best to you!

Rebecca Olson I am excited for you!!! Best of luck with the new four -plex and keep learning through Bigger Pockets! @Marcia Maynard thanks for your reference about your tenant screening document - I'm going to check that out too- hoping ill need it sooner rather than later!

@Account Closed - Congratulations on your intentional acquisition. I am curious to know about your COCR, are you expecting somewhere in lower 20's

wow, this plex looks amazing and it's a great price. if i knew about it, i'd give them 115k!!!

great job!

Looks pretty good. How did you find this property? I don't recall seeing it on the MLS.

Congrats!! It looks like a winner

And don't worry a bit about any lack of enthusiasm from your non-investor friends. They may just be secretly convinced that you're buying yourself a headache, but in a few years I bet some of them will start asking you for investment advice ;)

Congratulations!!!!

wow, awesome purchase.  I'm jealous, Congratulations on your investment.

You'll find that happens a lot. Not many people will really understood how incredibly good your deal is unless they're also investors.  So if you really want to have your effort truly appreciated, this is a great place to do it! Every once in awhile your family/friends may ask how many units you have. Even if you go through the numbers, they're more than likely to just have their eyes glaze over with a complete lack of interest. :-)

As for the deal. That really is amazing that you can get a 4 plex like that for 113k.  What would it cost to build that thing? 250k maybe?   Think about that...

A loan of 90k with rents of roughly 550/mo.
Not sure about taxes and insurance on it. But your payments on 90k are likely only about 500 to 600/mo. I'm guessing taxes and insurance another 500 maybe?  Thats 1k a month left for gross profit.

Estimated occupancy for that area? 90%?  So $200 a month for occupancy and $250 a month for repairs?  Should net about $500 a month plus your principal paydown, plus tax benefits, plus appreciation.  And the fact that you're raising the rent should force appreciation right from the get go.......

Gotta love it.......  All for putting in the effort it took to find it, analyze it, get the financing, and take it down.

Thats why real estate is so fantastic. Nothing else comes close to it.

Congrats!! Looks like a beautiful property.

Thanks, everyone! @Tyler Smiarowski , i found it on realtor.com. Hopped on it the same day it showed up on the listing site!

@Mike H. , All of your estimates are dead on. The "replacement cost" i was quoted was 290k, good and bad... my insurance premium is ~150/month.

@Nilesh Makhija This is my first time calculating COCR, but i came up with about 32.

@Marcia Maynard   THANK YOU for the tip on reading about buying a place with tenants in place. This is going to be quite the adventure!

@George P. they had it listed for 122, so your 115k offer would've probably been accepted ;).

Thank you all for your support! And you're right, most people are nay-sayers because they think most places are money pits!

Thanks again guys, i love this forum :)

@Account Closed  

That is absolutely awesome, I am very happy to see another make it.

Those numbers add up realllllly well.

Are you planing to cash flow a great deal of it, or pay of the mortgage quicker?

Your enthusiasm is well shared here, Congratulations!!!!!

@Rebecca Olson Congratulations! That is a very nice looking property. How did you come across this gem?

Congratulations! And good luck to you!!

Wow that is so cool! beautiful building and congrats @Rebacca Olson. And the bigger pockets community is great for recognition rather than non investors. The first step is the hardest, so keep up the good work!

Congratulations, @Account Closed  !!!

Great to see that all of your hard work paid off.  I agree that there will never be anyone on BP that won't be excited to hear about a successful deal.  It's even more exciting to see that it is a local deal!

Celebrations in Cedar Rapids will happen!  Again, congrats!

Thanks everyone! I couldn't be happier with my first deal :).

@Paul S.    I found it on Realtor.com!

@Austin Davis Thank you! Can't wait until the next (my first) REI club meeting ;).

Congratulations the place looks like a winner. And the reality is people will share in your success a lot more when they understand it. So like everyone has been saying here is the place where everyone will gladly say FANTASTIC JOB!!! I wish you much success and hope to be able to share a story like this soon. Again this is really awesome!

Congratulations .. Good find..don't worry about others lack of excitement . Keep calm and keep moving on

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