Deal #1 - Duplex in Norwich

17 Replies

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Norwich.

Purchase price: $179,000
Cash invested: $7,000

First Property done and in the books. House hacking a duplex. Should cash flow nicely once I move out and both sides are rented.

What made you interested in investing in this type of deal?

Financial freedom. Brandon Turner explained house hacking as an easy entry into the real estate world. I had very little cash and this seemed like the best way to get started.

How did you find this deal and how did you negotiate it?

I had a real estate agent showing me 5-10 properties every weekend for a long long time. Had little cash to put into any deal so was always looking for seller credits / seller financing / and above all else the numbers had to work and cash flow. It took a long time until I found a house at the right price and right condition with the seller offering to pay some closing costs.

How did you finance this deal?

This was a standard FHA loan with 3.5% down.

How did you add value to the deal?

I haven't really added much value yet. The house is 6 years old and nothing is in bad condition yet. I did get a tree removed that was growing over the house and causing mildew to grow. Power washed the house. Painted the empty apartment. Bought new washer and dryer units and a new fridge as the existing ones were broken.

What was the outcome?

I live in one side. I have a tenant in the other side. The mortgage is $1378 the tenant pays $1567. Once I move out and rent the other side the property should cash flow.

Lessons learned? Challenges?

It's not as scary as it seems.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

The real estate agent I used is no longer an agent, he switched careers. The mortgage broker I used was Dana at supreme lending. mention I sent you =]

Great Job @James O'Connor .  Having patience pays off.  How long had you been looking?  I will most likely make my first purchase in 8-12 months so maybe I should get an agent started now.

Originally posted by @Scott Rogers :

Great Job @James O'Connor.  Having patience pays off.  How long had you been looking?  I will most likely make my first purchase in 8-12 months so maybe I should get an agent started now.

 I had been looking at properties online and learning/  wanting to get into real estate for about 5 years. When I finally had debt paid down and a good job to get pre approved, my agent and I looked at properties for a year before deciding on this one. Paid for inspections on 3 other properties but i backed out of those for various reasons and I'm glad i didn't settle for something mediocre. 

I'd gladly help you run numbers or give my 2 cents on properties you're looking at. 

@James O'Connor

Congratulations on the first deal! I just moved to Connecticut myself and I’m working on building up my knowledge of real estate investing and my knowledge of the area.

Seeing someone start to get it done in this area is definitely inspiring me to get things moving!

Originally posted by @Tom Makinen :

Wait you found a 6 years old house in Norwich?  Everything I see is old and ugly

 Just got lucky on that one. It was actually built in 2011 so 8 years old, idk what I was thinking earlier saying 6. There's not much new construction that I find in searching. 

Originally posted by @Kyle Campbell :

Nice job James, good to see there’s investing in norwich. That’ll be a great one for you, especially if the plaza across the street gets redeveloped. Good luck with it. 

 Hopefully it does. It was disheartening to see it go abandoned within the first year of buying this place. 

Is there any growth in Norwich.  It seems really sad.  I am trying to upgrade my mom's house there, but I don't even know if I should bother

Originally posted by @Tom Makinen :

Is there any growth in Norwich.  It seems really sad.  I am trying to upgrade my mom's house there, but I don't even know if I should bother

 That I do not know. House sales month to month looked steady, no increase or decrease from what I was reading.

Originally posted by @Michael Noto :

@James O'Connor Sounds like the agent you worked with was patient with you as you searched for a property that fit your needs. Definitely an important part of the equation. Congrats on this deal. What's next?

Next up is BRRRR method on deal #2. On the search for a property within an hour distance from me.

Originally posted by @Kwame Darko :

@James O'Connor are you still able to cash flow with this house hack?

 With me living in one side, the rent covers my mortgage payment with a little extra to spare. So from a numbers standpoint and counting all expenses it does not cash flow until I move out and get the side I'm living in rented. BUT from a realistic standpoint I'm only paying my utilities to live here and saving for any repairs that could come up - pretty sweet deal I think.

@James O'Connor Congratulations!

You have completed your first deal which is the hardest one. Now that you have a taste of the business you will be super motivated, fascinated and excited to do your next deal.

Keep going and you will be amazed at what you can accomplish!

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