Fully Rented My First Multi-Family

20 Replies

I was so happy yesterday about something nice that happened I just want to share my good news.

I bought my first investment property last December and then spent the next months fixing it up.  I had to change contractors in the middle after the first one marked up prices of things from Home Depot -- as if I couldn't check.  But he also had a self-esteem problem and kept needing positive feedback and I got sick of it.  

Last December, after I was under contract and days before closing I spoke to the realtor agent who helped me buy the house.  I asked what she thought I could rent each floor for.  She said $700, or $750.  That stunned me.   I asked if this was in current condition or with all new windows, new floors, new lights, new counters, etc.  She said it was after repairs.   I was floored and I told her so -- but I didn't say I never would have bought this house if that was true because I didn't believe her.   (FYI, this 3 family house was always owned and lived in by generations of one family so there was no history to check.)

Here's how it played out.   I decided to use the first floor for myself -- the whole reason I bought property in Worcester was I could not find rental property for my own use with two dogs.  I do advocacy work here and wanted a place to stay, so I took the first floor.

On the second floor I rented out two bedrooms separately, with the tenants meeting and approving of each other.   A couple is in the larger room paying $700 including utilities and a single woman is in the other room paying $550 plus half utilities which are in her name.  (I pay her the other half out of the couple's rent.)   I'll take in about $1,175 a month after paying half of the utilities.

On the third floor I also rented out two bedrooms separately with the tenants meeting and approving of each other.  There is a middle aged single man in each room.  One pays $625 plus half utilities and other pays $550 plus half utilities, which are in one man's name. That's $1,175 a month.

They all signed leases, the last one this week.  All have paid their rent.    I think RE investing suits me just fine.  Just wanted to share it.

Thanks for sharing the post. My personality would not be suited to living with that many people. Are there any issues with insurance, being that not everybody is related.? Do you feel you need coverage for additional liability? I was renting separate rooms to two ladies and the personalities collided and I had to play ref. Two menopausal, single women, what a delight.

@Kate B.

Thanks for sharing Kate. Great job and keep at it!

that's awesome!!!! Congratulations ;) 

That is awesome! Look forwed to seeing your next acquisition ;)

Originally posted by @Scott Harper :

Thanks for sharing the post. My personality would not be suited to living with that many people. Are there any issues with insurance, being that not everybody is related.? Do you feel you need coverage for additional liability? I was renting separate rooms to two ladies and the personalities collided and I had to play ref. Two menopausal, single women, what a delight.

 Scott, I was upfront with the insurance guy about my plans and it made no difference at all.   I have found that the people on the second floor are working out nice ways to give each other space.   The couple has use of a vacation place in Maine, and the single woman has many friends around here who she does things with to get away.   I have my own unit and I travel a lot.   I have found it necessary to say "this will be a landlord's weekend off", to which I always get the response "you should have every weekend off".   Sweet.

I expect problems, and probably on the third floor.  The last person to move in wanted it immediately.   He is in town on a corporate project for a year, then going home to his family in Texas.   Because he was such a fine tenant on background, I said yes immediately, with the other man's okay.   Obviously personalities will matter.   I think the worst is someone will leave.   I can deal with that too.

Originally posted by @Elizabeth Colegrove:

that's awesome!!!! Congratulations ;) 

That is awesome! Look forwed to seeing your next acquisition ;)

 Thank you!

Originally posted by @Dave Bingham :

@Kate B.

Thanks for sharing Kate. Great job and keep at it!

 Thank you!

Congratulations man! Hope to hear more from you on your continued journey!

Originally posted by @Skylar Dejesus :

Congratulations man! Hope to hear more from you on your continued journey!

 Thank you!   

thats awesome Kate!!!

@Kate B. That is awesome! Congratulations. I'm hoping for similar success in the future. 

I understand your handyman situation, but wanted to let you know contractors often mark-up items from Home Depot, they spent gas and time making the purchase so it cost them more than just the materials. It can help to work out a fair mark-up in advance for time & material projects and require receipts. Or (usually to my benefit) I prefer a quoted job where everything is included regardless of their time, gas, or material costs.

Wishing you all the best in this endeavour!

This is a great post. Thank you for sharing!

My uncle did something very similar and retired quite well.

To your continued success!

Originally posted by @Cindy D. :

@Kate B. That is awesome! Congratulations. I'm hoping for similar success in the future. 

I understand your handyman situation, but wanted to let you know contractors often mark-up items from Home Depot, they spent gas and time making the purchase so it cost them more than just the materials. It can help to work out a fair mark-up in advance for time & material projects and require receipts. Or (usually to my benefit) I prefer a quoted job where everything is included regardless of their time, gas, or material costs.

Wishing you all the best in this endeavour!

 Cindy, I hear you.  I had quotes on jobs, but more were added.  I also asked him if he was including his gas and time for shopping and he said he doesn't do that because he is in Home Depot every day.   It was just a problem he had with everything, rounding it up, and he admitted it.   When I planned a run to the dump, I asked what it cost, if he knew.  He quoted me $30 higher than it was -- for my trip to the dump.   I'm probably not explaining it very well.   I do always get quotes for full projects.   I also decide to do some things myself after I get quotes.  

@Kate B.

If that was your goals awesome! I am concerned you might have tenants issues with untiliey slits and some being in different individuals names but hopefully everything is smooth.

Originally posted by @Account Closed :

@Kate B.

If that was your goals awesome! I am concerned you might have tenants issues with untiliey slits and some being in different individuals names but hopefully everything is smooth.

 Ardie, thanks for raising that -- it confirms I was right to check it out!   The house has four electrical meters (including LL) and three gas meters.   On the second and third floors, the utilities are in the names of the first two tenants to move in on each floor.   I pay half of the second floor utility bills from the rent of the other occupant who came later.   On the third floor, the occupants split it and work it out themselves.   If needed, I'll change that for the future.

@Kate B.you explained it very well. He sounds like a difficult and unscrupulous character. Good job firing him. I hope all goes well moving forward. Thanks so much for sharing all the details. Good luck!

congrats Kate B.all the best 

Originally posted by @Bhekizwe M. :

congrats Kate B.all the best 

 Bhekizwe, thank you!

Keep up the good work.  Congrats! 

Originally posted by @Jose Salcedo :

Keep up the good work.  Congrats! 

 Thank you!    It's a nice feeling to end the week this way.

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