Purchase of a duplex in Carpentersville IL.
Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $207,000
Cash invested: $25,000
House hacked duplex with a 2 bedroom and a 1 bedroom unit which needed some renovation and repair. Refinancing in June to increase cash flow, and will move out in December to rent out current unit I reside in. Monthly cash flow $200 now, projected after refinance and move-out to be ~$1,100 a month at 100% efficiency.
What made you interested in investing in this type of deal?
It was a cheaper uglier property near me. It was exactly what I was looking for! An ugly home that could be easily purchased from an owner looking to sell quickly.
How did you find this deal and how did you negotiate it?
My agent and I saw this and were initially quite weary on the property. Looking through the property in person we saw many opportunities to make repairs and refurbishments that would allow for higher rent and higher cash flow.
How did you finance this deal?
Saved up enough for a 15% down with a good amount of buffer. Contingency is to stay in this residence for 1 year due to the contract. Loan also came with a but of credit that took care of closing costs, which also allowed for more freedom with the repairs.
How did you add value to the deal?
New vinyl flooring, updated appliances, new cabinets, new paint, updated closets in the bedrooms, updated vanity in the bathroom (with a brand spanking new toilet seat ;D), and updated in unit laundry.
What was the outcome?
Outcome is a happy tenant! Renting out for $1,500 a month which takes care of total monthly payments plus $200 a month which is being used to refurbish the current unit I reside in.
Lessons learned? Challenges?
Learned a lot about property management and delegation of tasks and jobs during the refurbishment. Everything was done efficiently and overall under budget. Very grateful for the help I received, and for the things I learned getting my hands dirty.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I worked with a lender named James Pericht at Fairway here in the Chicagoland area. He did a great job of making everything smooth. Hooked me up with some fine people for utilities and insurance and whatnot. Never a single complaint about anybody associated. James was a very intelligent individual who had answers to every question, and solutions to every issue. Amazingly easy to work with. 11/10