2 Units in San Jose, first investment, used FHA financing

[Brian Raynoha]

Investment Info:

Small multi-family (2-4 units) buy & hold investment in San Jose.

Purchase price: $380,000
Cash invested: $50,000

Short Sale, 2 units, 3 bed 2 bath house plus a 1 bed 1 bath over a 2 car garage.

What made you interested in investing in this type of deal?

Was just trying to buy any multi-unit deal at the time.

How did you find this deal and how did you negotiate it?

At this time there were tons of short sales. This one is not my top choice.. but we were able to get it at a good price. Tried to get additional credit, bank told me to buy at a price offered or get lost.

How did you finance this deal?

FHA, then conventional

How did you add value to the deal?

Painted, Electrical, Changed out bad tenants, completely renovated the 1 bedroom, Raised the rents

What was the outcome?

Rents have come up almost 200 percent since I purchased the property. The property barely broke even for the first couple of years.

Lessons learned? Challenges?

Dont take bad tenants... Be patient.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I represented myself in the deal.