Small multi-family (2-4 units) buy & hold investment.
Purchase price: $54,000
Cash invested: $1,000
Bought this duplex with cash obtained through a private investor. They were asking $65k, we offered $55k cash and they accepted. After we did the home inspection we asked for $5k in concessions to fix what needed to be fixed, they declined, and said they would fix the issues, that they had already dropped enough off the price. After they fixed all issues we closed. When the real estate agent did the final walk through she told us they had spent nearly $10k on all repairs including updating the old fuse boxes into brand new breaker systems, with new meters, and main lines from meter to breaker, also new roof, and some plumbing.
We currently have both units rented for $625, and $550 (inherited tenants, rent will go up for this unit in the future), $1,175 total. Our loan amout with the private investor is $866, at 5% interest, taxes and insurance around $200 a month, current cashflow $100+. Loan will be paid in full in 6 years.
What made you interested in investing in this type of deal?
We are growing our portfolio of small multi family's.
How did you find this deal and how did you negotiate it?
Listed on the MLS offered cash they accepted.
How did you finance this deal?
How did you add value to the deal?
What was the outcome?
Own the property, and have both units rented.
Lessons learned? Challenges?
If soneone asks for seller concessions to give it to them if its reasonable, that way it is on the buyer to fix the issues, that may cost even more than what they asked for. Also if you fix it as the seller odds are the buyer wont be happy with it anyway.
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