Investment Info:

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

Purchase price: $23,500
Cash invested: $10,000

Duplex purchased with an unfinished 2nd unit. Property purchased with owner financing and interest only payments. Rehab work on the 2nd unit included electrical upgrades, plumbing, HVAC, flooring, and finishing (sheetrock, fixtures, paint, etc). Also converted the unit from a 2/1 to a 3/1.

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

I originally didn't want to do this deal due to it being a duplex. I typically prefer 3 units and above but we were able to work the numbers and the terms worked very well for me. I became interested because I could add a property to my portfolio with little cash outlay and hold onto it for a while without expensive mortgage payments.

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

My handyman brought me this deal as he was working on it and ran out of bandwidth to finish. We worked out an owner finance deal with 10K down and promissory note for 23,500. I was able to rent out one side immediately and have been slowly working on the second unit.

How did you finance this deal?

Owner financing with 10K down and a promissory note for 23,500. We did interest only payments for 150 a month while I rehab. After rehabbing and renting out the top unit, I will refinance and pay off the note.

Lessons learned? Challenges?

Lessons learned were with contractors. I had an issue with my HVAC guy where he didn't finish the job and didn't provide all of the equipment. He left some of his equipment but I lost out in the end. Lesson learned - you get what you pay for and make sure you have strong contracts in place. I relied too much on a previous relationship with him and got burned in the end. Had to hire a new HVAC guy who cost me more in the long run to fix everything.