Small multi-family (2-4 units) buy & hold investment in Calumet.
Purchase price: $85,206
Cash invested: $3,500
Duplex with 3 bed and 1 bath @ 1300 sq. ft. each side. One unit has garage. Brand new boilers installed for each unit.
New appliances also installed.
How did you find this deal and how did you negotiate it?
Went back and forth on price due to boilers being worn out. Ask price was $79,000.
How did you finance this deal?
This is a house hack using a FHA 203(k) loan.
How did you add value to the deal?
Adding new boilers as part of the mortgage.
Also the house hack itself, as one unit was move in ready, and the other unit needs work. While renting out the nice unit, I can work on the other unit while living in it, thus satisfying the terms of the FHA loan. My unit will need a complete kitchen renovation, which is almost done, and new flooring.
What was the outcome?
The loan was around $88,000, and the building appraised for $100,000 before the boilers were installed. One unit will have a new kitchen and floors, so I'm expecting a better appraisal in 6 months to a year, market depending of course.
Lessons learned? Challenges?
Persistence is key.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes, my local agent was inexperienced, but worked diligently to get this deal closed. Neither of us have ever dealt with a rehab loan before. The selling agent was also helpful in finding an appraiser in decent time.
Updated 21 days ago
I should have mentioned that the purchase price was negotiated to $69,000. Then there was another $19,000 in the mortgage for boilers/miscellaneous repairs.
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