First Rental Property Purchase
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $490,000
Cash invested: $110,000
Duplex inside of City of Decatur, great schools nearby in a high cost of living area which makes it hard to fill the unit outside of the summer (a lesson we learned when the house sat empty until a HUGE surge of people wanted to move in during the summer). Both units were filled quickly once summer hit, I've put in about 15k worth of repairs/improvements so hopefully nothing ever breaks again for at least 5-10 years.
What made you interested in investing in this type of deal?
Wanted passive income, learned quickly that things aren't so passive to start.
How did you find this deal and how did you negotiate it?
We let our real estate agent know we were looking for a duplex or triplex for an investment property
How did you finance this deal?
How did you add value to the deal?
Our unit had a massive backyard that was not enclosed. We had a fence built, which attracts renters with pets which allows us to charge a minor pet rent fee plus I've read that pet renters typically take good care of units and are more likely to stay in a rental property instead of bouncing between apartments.
What was the outcome?
I've got two great tenants and our rent covers mortgage, insurance, property tax plus a small amount on top. That being said, having the property be empty for 4 months was a stressful emotionally and we constantly questioned whether we made a good decision purchasing. I still have no idea what the right strategy is with this unit and how to handle our taxes. I know the repairs and improvements are tax deductible, but no idea on if its a good idea to pay of the mortgage quickly or if that hurts my ability to claim tax deductions.
Lessons learned? Challenges?
Buying a home in a high cost of living area with great schools is great because people want to live cheaply in expensive places if the schools are good, but not until summer time.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
We used Jason Cook at Ansley Atlanta whom we have used for our primary as well. Our lender was Liz Costley from Bank of America that is also fantastic and was working with us at every step of the way to get us the best deal.