I closed on my fourth rental property

I closed on my fourth rental property

Investor · Prescott/Tempe, AZ · Member since 2013 · 73 posts · 57 votes
It’s been almost six years since I bought my first duplex. Next door to that there was another duplex I have been eyeing and lusting after for six years. Three years ago a young couple bought it and I befriended them. Whenever they had questions about taxes or anything else real estate, or even just needed a second set of hands to unload materials out of their truck I helped them in any way I could. I tried to pay it forward if I could help. Earlier this year when I did a 1031 exchange for a live in flip I did, I tried to persuade them to sell their duplex me. They politely declined. Since then they’ve bought a couple houses and become engaged. About nine months later they called and said they wanted to sell after all. I secured financing using an owner occupied fifteen percent down loan. The price was 330k, 20k below what my duplex appraised for earlier this summer and the seller agreed to pay most of my closing costs. I just closed this weekend. As a full time employee who does smaller scale investing on the side I sometimes get discouraged when I see others do a bunch of deals and I average one every year and a half. So I want to share this especially for people like me who are still hustling to scale up. Stay resilient and intentional about your goals and your property search criteria. As long as you keep being intentional, your no could become yeses in less than a year. Also even if you at first get a no, keep being yourself and trying to pay it forward. If you don’t take a no personally and stay likable and helpful, you put yourself in pole position to get the first call when the become a yes. So you may be getting closer to your goals than you realize yet. :)
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Rental Property Investor · Salem, OR · Member since 2017 · 696 posts · 660 votes
7y

@Matthew Perry Awesome work and way to stay persistent!     Relationships are the secret sauce if there is one!

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  • Rental Property Investor · Salem, OR · Member since 2017 · 696 posts · 660 votes
    7y

    @Matthew Perry Awesome work and way to stay persistent!     Relationships are the secret sauce if there is one!

  • Investor · Roseville, CA · Member since 2016 · 893 posts · 1k+ votes
    7y

    Great job @Matthew Perry!  We always get back more than we give so it's always good practice to give as much as you can to those you can help.  This is yet another story where that is true!  

    Congrats! 

  • Investor · Prescott/Tempe, AZ · Member since 2013 · 73 posts · 57 votes
    7y
    @Richard Sherman thank you. :)
  • Investor · Prescott/Tempe, AZ · Member since 2013 · 73 posts · 57 votes
    7y
    @Jon Crosby thank you. :)
  • St. Petersburg, FL · Member since 2015 · 317 posts · 71 votes
    7y

    @Matthew Perry How are you financing?    Are you able to recycle money from your 1st duplex or are you using personal money each time?

  • Investor · Prescott/Tempe, AZ · Member since 2013 · 73 posts · 57 votes
    7y

    @Tim Kaminski it depends on the property. For one I saved up the down payment, but that took years. Once I did a 1031 exchange where I took enough cash out to do an fha owner occupied and put the remainder of the proceeds into the exchange. For this one I had a lot of equity in the first duplex because I bought it on a fifteen year note. But I didn’t want to do a cash out refinance because I’d lose my lower rate. So I found a Banc that does second mortgage up to sixty percent loan to value. So I did a second mortgage from that property for the down payment.

  • Real Estate Broker · Minneapolis, MN · Member since 2016 · 530 posts · 398 votes
    7y

    @Matthew Perry congrats! Is this property ready to go or is there any work you plan on doing to it?

  • Investor · Prescott/Tempe, AZ · Member since 2013 · 73 posts · 57 votes
    7y

    @Bjorik Mutize the previous owners had done a hardcore rehab within the last year, including new tile floors, cabinets, appliances, etc. All I’ve needed to do is touch up the caulk job between the baseboards and tile. There were some gaps with spiders I recaulked and sprayed for spiders before moving into the vacant unit.

  • Real Estate Broker · Minneapolis, MN · Member since 2016 · 530 posts · 398 votes
    7y

    @Matthew Perry that’s awesome. Congrats again, keep it going!

  • Rental Property Investor · Bellefonte, PA · Member since 2018 · 73 posts · 30 votes
    7y

    @Matthew Perry congrats! Very inspiring story!

  • Contractor · Pensacola, FL · Member since 2018 · 303 posts · 240 votes
    7y

    @Matthew PerryCongratulations that is awesome

  • Rental Property Investor · Harrisburg, PA · Member since 2018 · 369 posts · 406 votes
    7y

    @Matthew Perry Thanks for your post. We have to constantly remind ourselves to be patient, we have unit one and it is going very well, just passed a year with it as owners and STR managers (And cleaners!) and love it...now we're eager to implement our Grand Scheme but won't be in the right position for unit 2 until this coming fall. We won't buy something just to have something and are still absolute rookies at this real estate game, but sometimes I bite my tongue and want to say "F-it, lets GO!" But we are small scale side RE investors like you and your post is a reminder that we'll get there.

  • Investor · Prescott/Tempe, AZ · Member since 2013 · 73 posts · 57 votes
    7y

    @Doug Pintarch absolutely you will. :)

  • Realtor · Camarillo, CA · Member since 2014 · 162 posts · 102 votes
    7y

    You are doing great @Matthew Perry! You did a great job following up and building a relationship with a potential seller. Those are the skills that will serve you well when you scale to bigger properties.

  • Investor · Prescott/Tempe, AZ · Member since 2013 · 73 posts · 57 votes
    7y

    @David Gonzalez thank you David. Your friendship and positively is a blessing I appreciate. :)

  • Rental Property Investor · St. Louis, MO · Member since 2017 · 48 posts · 14 votes
    7y

    That is a great story! Thanks for sharing

  • Rental Property Investor · Berkeley, CA · Member since 2018 · 30 posts · 18 votes
    7y

    @Matthew Perry

    Great story thanks for sharing and congrats!

  • Saint Joseph, MO · Member since 2018 · 401 posts · 244 votes
    7y

    I love it.  I am wanting to buy a fleet of duplexes myself.  The way I see it, I only need 10.  So far I am at zero haha.

  • Investor · Prescott/Tempe, AZ · Member since 2013 · 73 posts · 57 votes
    7y

    @Ryan Proffit you’ll get there. :)

  • Springfield, MO · Member since 2017 · 158 posts · 114 votes
    7y

    @Matthew Perry congrats buddy!!

  • St. Petersburg, FL · Member since 2015 · 317 posts · 71 votes
    7y

    @Matthew Perry Is that similar to a HELOC? A second mortgage.

    You are still able to cashflow from each duplex after you pulled the second mortgage?

  • Rental Property Investor · NV · Member since 2014 · 241 posts · 85 votes
    7y

    Congrats! It's always great to hear someone benefit from just being a nice and helpful person 

  • Rental Property Investor · Merrick, NY · Member since 2017 · 33 posts · 31 votes
    7y

    Congratulations!

  • Investor · Anchorage, AK · Member since 2016 · 222 posts · 294 votes
    7y

    @Matthew Perry Congrats! I have one question about your post though. You said you 1031 exchanged a "live-in-flip".. Why did you have to 1031 exchange something that should have been tax free gains? did you not live there for 2 or more years?

  • Investor · Prescott/Tempe, AZ · Member since 2013 · 73 posts · 57 votes
    7y

    @Tim Kaminski It is similar. But it is fixed over 13 years and it doesn’t have to be reviewed yearly. It also does not have a pre payment penalty. The interest rate is moderate at 6.3 percent. They would cash flow if I didn’t owner occupy one of the units.

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