Small multi-family (2-4 units) buy & hold investment in Lillington.
Purchase price: $178,000
Cash invested: $781
1999 / 3 Bed 2 Bath / 1050 sq ft / side by side duplex. We had a buyer for our previous home and were looking for a multi-family obtain with a VA loan and house hack. When these turn key duplexes came onto the market they were the perfect fit for our needs and at a very opportune time. After 2 days on the market, there were only a few left not under contract. My wife and I checked out the remaining duplexes (All 3 bed 2 baths) and put in an offer on the one that appeared in the best condition.
What made you interested in investing in this type of deal?
Turnkey multi-family perfect for a VA loan. Also the location (nearby university, commuting distance to Fort Bragg and Ralegh, NC). I was originally looking for a live-in flip until my super smart and patient realtor Daniel Kidd explained the immense benefits of using your VA loan on a small multi-family property.
How did you find this deal and how did you negotiate it?
My super awesome realtor, Daniel Kidd, texted me as soon as he found these duplexes because he knew they were perfect for we were looking for. The seller was not willing to go below asking price considering how fast these properties were going under contract. I was, however, able to wrap the closing costs into the loan by offering $4,500 more than the asking price and then $4,500 in seller paid closing costs.
How did you finance this deal?
I was also able to wrap the VA funding fee (3.3% because this was my 2nd VA loan with 0% down) into my loan which allowed me to purchase the property for very low money down. Even with an inspection, after closing, I was all in on the property for $781.
How did you add value to the deal?
This deal was pretty much turnkey other than needing a new vapor barrier (estimate for $500) which I plan on doing myself. Other than that, our only plans for the property are to take down the wallpaper, throw on some fresh paint, sand and paint the deck and put a renter in one side. Rent was way below market value so we were able to raise the rent without any upfront rehab.
What was the outcome?
We are currently screening tenants and it's looking like we are going to get a solid tenant in there on July 1st at $995 a month. The mortgage is $1063 a month so we are almost living for free. When we move, at $995 a month in both side this, this duplex should be easily cash flowing $200 per door after cap ex, maintenance, vacancy, and management.
Lessons learned? Challenges?
When inheriting tenants, no matter how close their lease is to being up or even on month to month, ALWAYS get an Estoppel Agreement from them before you close. There was a discrepancy with what the rent roll deposit amount said ($850) and the check I received ($775). This was easily fixed by emailing the tenant and asking how much their deposit was and checking that with the what the lease said.
Get ALL your deposits before closing. There was a disagreement (between the seller and I) if the pe
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Chalie is one of the first people I connected with here on BP through a keyword alert for the town I was living in. She introduced us to the local REI meet up called Pints and Properties which is hosted by Five Pillars Realty Group. It's there that we met Shelby which led to Dan being our real estate agent. Dan is a very smart and motivated agent/investor. From that first Pints and Properties meet up we closed on this duplex less than 90 days later.
Congratulations! Those are nice units and in a good location. Taking the wallpaper down will raise the rent for sure!:)
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