First Investment Property
Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $143,000
Cash invested: $37,000
This is a beautiful, 4-unit apartment complex in a stable rental market of Kettering, OH. All four units were renovated by the previous owner, who bought the property for $90,000 on a shortsale, 5 years prior.
What made you interested in investing in this type of deal?
As I was informed by my previous real estate agent, multi-unit properties are cash cows for those interested in investing in real estate long-term. This property is no exception. It's being rented (all four units) for well-below market rates of $525/month, yet still raking in $790/month of cashflow. After electrical, gas, and other expenses, the total net income is around $550/month, but with room for about $400/month of growth.
How did you find this deal and how did you negotiate it?
I found it through my real estate agent, Colleen Carr, who herself found it on the MLS. She took me out one day in November of 2018 to look at four separate 4-unit complexes. This one was head-and-shoulders above all the others in terms of quality and price point. It was already well below the price of the other properties and in much better shape, but Colleen was able to negotiate an additional $3k off the purchase price, and get $1500 at closing for various repairs.
How did you finance this deal?
25% down conventional loan for investment properties. 6% interest rate, due to credit checks from my previous home acquisition lowering my credit score slightly (could refinance later if we hit another low in the market!).
How did you add value to the deal?
So far I have ordered the repair of the vinyl siding, placed a metal dish under the water heater to prevent corrosion due to leakage, and plan on eventually re-paving the entirety of the driveway, garage, and sewer drains. Various other repairs are slated for later dates as well.
What was the outcome?
I purchased the property with some help from my parents, intentional co-investors in this property. They intend on carrying out this same process with me for 1 property per year, for the next 6 to 10 years.
Lessons learned? Challenges?
Getting started in real estate, like almost anything else worthy of your time, requires you to take action. You can't simply sit on the sidelines for years, researching. You get analysis paralysis doing that. Get a real education in the school of life. My down payment on this property was equivalent to 1 year in college, and it suited the education I received in so doing. For those afraid to start, as Shia Labeouf says, "DO IT! JUST... DOOOO EEEET!!!"
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
1. Real Estate Agent: Colleen Carr
I highly recommend Colleen to anyone trying to purchase properties in the Dayton area. She is very good at what she does. Ranked top 50 agents of the greater Dayton area.
2. Mortgage Broker: Phil Forbes
He has gotten me the very best mortgage rates possible thus far, and always finishes the mortgage process well ahead of closing.
