My first Deal - Owner occupied duplex

1 Reply

Investment Info:

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

Purchase price: $395,000
Cash invested: $22,000

This duplex was my first deal. I bought on an FHA loan and owner occupied one side for 12 months. Cashflow represents all budgeted expenses like vacancy, turnover, maint, etc.

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

I had always wanted to buy rentals (since 2002). However, nearly 20 years later the circumstances were right to finally pull the trigger. Better late than never.

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

Through my agent. This was a property that was on MLS and was re-listed as the buyers before me couldn't perform. It became available and I jumped on it. Rent on the one side is below market and I am slowly bringing it back to market. I didn't really do a good job negotiating...looking to improve my skills.

How did you finance this deal?

FHA

How did you add value to the deal?

No.

What was the outcome?

Still holding. Been a good property so far. Have had a some CapEx this year (New AC on one side, New windows on the other) and will need a new driveway eventually.

Lessons learned? Challenges?

Tradeoff between being nickel and dime by tenants and providing a good product. Always have done what was right to make sure property conforms to a high standard and is desirable. As such, my maint expenses are higher than I like. Because I am leveraged so much, quarterly cash flow fluctuations have varied - but so far have been above projections. After replacing the windows and AC this summer, that will be a big hit.

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

My agent was awesome. But he moved out of state and I have not found one that I really like.

@Jay Schultz : congrats on your first deal. I am a newbie and I am always excited to read about how people take the first step. I am in the self education phase right now, but have a 6 -8 months timeline before getting my feet wet.

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