Small multi-family (2-4 units) buy & hold investment in Pueblo.
Purchase price: $350,000
Cash invested: $95,000
4 plex in Pueblo, CO in decent shape.
What made you interested in investing in this type of deal?
Targetting Multifamily along front range for cashflow
How did you find this deal and how did you negotiate it?
MLS. Originally offered $315k which would have made it pure cash flow with then present rents a small amount. When winning bid fell through, we took backup position at breakeven pure cash flow, but below market rents.
How did you finance this deal?
Conventional. 25% down
How did you add value to the deal?
Mostly through turnover, gross rents have increased by ~$400/mo over 1.5 years.
What was the outcome?
Operating well. Many challenges for first time landlord.
Lessons learned? Challenges?
During the final walkthrough, one of the tenants informed us they would be late on rent. Another tenant also was late first month. Had to get those systems running faster than expected.
Furnace died first month, water heater 5 months later.
Unexpectedly high insurance.
Bought at beginning of the pandemic (we were watching it early as a coworker nearly got locked down in Wuhan in December 19).
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Wayne Tucker - Mortgage Broker
@Jason Levinson - Real Estate Agent
Are you willing to share your gross rents?
At the time, memory says that it was 2950. It's now to 3400. PITI is ~$1500
All numbers are from memory, btw. So may vary a little.
Any major renovations, or just the repairs you mentioned?
No major renovations. The capex was somewhat significant and instant (but could have been easily worse). As units have turned, we've been trying to make minor improvements, primarily preemptive maintenance. I expect that ~10k of renovations per unit would increase rent I could reasonably expect by another $200-300/month per unit. Untested.
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