First was by accident, the second was on purpose
Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $180,500
Cash invested: $45,125
My second property purchase. Side by Side duplex purchase with one unit vacant and other unit under lease located on a dead end street close to a university. Performed slight renovation and rented the vacant unit within a few months of purchase. Other unit vacated at end of lease. Unit fully remodeled and rented.
What made you interested in investing in this type of deal?
Similar to my first duplex purchase, unit is larger than most and commands a higher rent/quality tenant.
How did you find this deal and how did you negotiate it?
Found through the MLS. In such a hot market, not much room to negotiate but managed to get a quality deal even at asking price.
How did you finance this deal?
Actually took a loan against my 401K to cover the down payment and financed 75% of it through Huntington Bank at 5.375% for 30 yr fixed. Huntington also has a program to help lower income areas grow and develop by covering all closing costs above $500. This unit fell within one of those areas even though it is probably considered a B area in my opinion.
How did you add value to the deal?
Units had been let go since the previous owner had purchased almost a decade ago, so a lot of deferred maintenance. We remodeled all the bathrooms, installed new carpet/flooring, replaced both furnaces and an AC unit, painted walls and trim, and updated landscaping. Plan on refinishing driveway and repainting outside in near future as well.
What was the outcome?
Both units rented and refinance in process. The refinance also applied for the closing costs being covered by Huntington so I am able to refinance and cash out for less then $1000 out of pocket
Lessons learned? Challenges?
Rents are inflated in the area due to the college. I assumed that but did not understand what that would mean. Had difficulty finding quality tenants due to this even though plenty of interest was shown.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes but I would not recommend them even though they were recommend to me as an investor agent. I actually felt my real estate agents fought me a bit during the negotiation. I felt I was negotiating with them more then the seller. I also had talked to one agent for months before I found the deal, only to be handed off to one of his agents with a lot less experience when we put in the initial offer.
