My first triplex deal - buy and hold
Investment Info:
Small multi-family (2-4 units) buy & hold investment in Worcester.
Purchase price: $216,000
Cash invested: $28,000
I purchased a distressed 3 unit and renovated the second and third floor units via house hacking. It is currently all rented out and cashflows at $950 per month after my budgeted expenses and reserves.
What made you interested in investing in this type of deal?
I wanted to get into multi family invested because I felt that creating passive income would give me the flexibility to one day leave my job through passive income. I wanted to find something I could BRRRR to move to my next deal
How did you find this deal and how did you negotiate it?
It took me about 5 months, using a realtor who specialized in multi-units and showed me about 35 properties before I found one that checked all my boxes
How did you finance this deal?
30 year fixed FHA mortgage with 3.5% down I accumulated through savings
How did you add value to the deal?
I completely gutted the second and third floors and combined the galley kitchen and bathroom into larger bathroom with laundry in units. I also installed high efficiency forced hot air systems rather than electric and extended the driveway to accommodate spaces for all three units which I include in the lease.
What was the outcome?
After about 2 years of house hacking and moving floor to floor living through renovations, I have all three units rented out for a total of $3100 with a $1721 mortgage. I cashflow $950 as I set aside the rest for my capex budget and monthly property manager's expense.
Lessons learned? Challenges?
I had to go through an eviction after rushing to place my first tenant and did not thoroughly vet them before hand and learned the value of using a property manager or real estate agent to do this for me. The property manager charges 1 month's rent to place a tenant which I turn around and have the tenant pay 1/2 of when signing the lease.