Small multi-family (2-4 units) buy & hold investment.
Purchase price: $140,000
Cash invested: $40,000
This is my first 4 plex, but definitely not the last. We caught a lucky break finding this deal and there's more opportunity where this came from.
What made you interested in investing in this type of deal?
I decided a while ago that the multifamily space is where I will focus my efforts. I look for deals with 2-4 units so I can take advantage of the cheap financing.
How did you find this deal and how did you negotiate it?
We were looking at a 4 plex on the same street on the MLS, so my wife called to see what they were getting for rent. She struck up a conversation with the owner and learned he was looking to start selling off his properties. We now have the option to buy more buildings from him. There wasn't much negotiation. We did this deal off-market so I got a fair price on it. It was in great shape.
How did you finance this deal?
I got a traditional loan for this deal. I had the extra money for the down payment because I was selling my only SFR at the time. I used that money here, and it was a much better use of those funds!
How did you add value to the deal?
There was no need. The building was turnkey with good tenants in place.
What was the outcome?
We have a great cash flowing 4 plex earlier than we expected. I now also have a path to early retirement. If I buy one building a year from this investor, I will be able to quit my day job much earlier than I initially planned.
Lessons learned? Challenges?
Put the recommendations on the podcast into action! What my wife did to find this deal was a lucky break, but it was because she tried something I had heard on the BP podcast multiple times. Call "for rent" signs. Think about it - landlords that are either tired of the game or a ready to retire are probably going to feel it most during turnover or eviction.
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