increased my cash flow by $608.00 in less then a year!
Bp! whats going on with everybody happy new year!
please if you havent already, go read my orignial post i made almost a year ago https://www.biggerpockets.com/forums/223/topics/649264-my-first-4-plex-first-property-first-real-investment?highlight_post=3848577&page=5
now that your all caught up, let me straight get into it!
I came to bigger pockets for some insight and opinions on investing in mfh in the las vegas market. and i must say, i got a lot more negative feedback then i did postive. Never the less, I did not let any of the ney-sayers discourage me from sticking to my guns.
i purchased my first 4 plex 02-15-19, ( my bday is feb 15 , god works in mysterious ways) almost a whole year from todays date.
When i first took the property over i didn't know anything about real estate! no were as close to what i know now. I had the basic understandings from watching some youtube videos, reading through bp discussion , and a few books and pod cast. I study the market i was interested in for about 4-5 months prior to me closing ( i wouldn't recommend that) I was sorta of pressed for time. I knew about all the good parts of las vegas and all the parts to stay away from. So i made my decision with that in mind and purchased about 7 mins outside of summerlin in the 89018 zip code. I found the deal on the mls for 369,900 at the time that was higher then all the other areas i looked at, and the cash flow was lower, but i knew that this area had more traffic and vitalization then other areas and to top it off no hoa.
When i took the building over it was being self managed by the landlord and some of the units needed work. so i knew that i was going to be able to add value. Rents were at $700 a unit (4 units) and majority of my leases were due within 5-6 months of me owning.
i was able to raise rent by $50 dollars for 2 of my units ( $750 each) one of my tenets moved out in October of 2019. I got a new tenet about a week later and was able to get $800 ( $100) increase. The previous owner stayed for about 6 months after closing and moved out in august. I remodeled that unit ( took 4 freaking months) and finished a week befor Christmas! During this time rates were at an all time low! so i was pressed for time because they were slowly climbing back up. $15,000 dollars I had a freshly remodeled unit! here is were it gets juicy! I was able to refinance my current loan from a 6.125% to a 4.875% saving me close to $200 dollars on my monthly! I was able to raise the remodeled unit rent from $700 to $950 (thats an 15% return on the money i spent on the remodel)! Went from getting $271.34 in cash flow with an 3.5% cash on cash return! To getting $879.97 in cash flow with an 11.42% return in less then a year. It gets better, during this whole process the market in vegas was going up! the value on my property went up around $70,000. paid $369,900 for it back in 02-15-19 here we are 1-5-20 and its valued at around $437,000! When every body was doubting me and telling me not to do it, i didnt let any of that discourage me. AS long as it made sence in my eyes thats all that mattered to me and im glade i went through with it! check out links below for pics!