First Real Estate Investment - Saint Louis
Investment Info:
Small multi-family (2-4 units) buy & hold investment in St. Louis.
Purchase price: $167,000
Cash invested: $42,000
Contributors:
Marie Robinson
This was my first real estate deal. The property is a turn-key, duplex located in Benton Park, St. Louis. Each unit has two bedrooms, one bathroom.
What made you interested in investing in this type of deal?
A few things jumped out when this deal popped up. The location was in an up and coming neighborhood in St. Louis, in which made it very enticing. We knew there was a good chance the neighborhood could see high appreciation in the near future. In addition, we ran the numbers, at a reasonable offer price, and figured out we would have nice cash flow. So putting it all together (duplex property, chance for high appreciation, and cash flow) we could not pass it up.
How did you find this deal and how did you negotiate it?
This deal was found on Rootstock, which has it's pros and cons. Our first offer was about $10,000 less than listed price, and the seller came back with a counter of $167,000.
How did you finance this deal?
We financed the deal with a conventional mortgage loan, with 25% down payment. Looking back, we should have screened other lenders who were willing to settle for a 20% down payment.
How did you add value to the deal?
The property was turn-key, and already had tenants in place. Besides some minor repairs, the property was ready to go after closing.
Lessons learned? Challenges?
There was definitely a lot of lessons learned and challenges, majority of which stemmed from our lender. Our lender was unresponsive, made many mistakes and ultimately resulted in our closing period getting extended about a month. The terms of the loan were less than ideal. Looking back, we should have screened potential lenders and found one that worked best with our goals. A lot of issues could have been avoided if we found a rockstar lender.
