Finally Closed My First Deal!
Investment Info:
Large multi-family (5+ units) buy & hold investment in Morganton.
Purchase price: $350,000
Cash invested: $52,500
Small 8-unit Complex. Figured I had to start somewhere, so why not start a few steps into the "stack" as Brandon calls it!
What made you interested in investing in this type of deal?
I felt that multi-family was the best way for me to get started because of the economies of scale. I believe that it is a more "forgiving" asset type and this size is perfect for where I was at financially and comfort wise.
How did you find this deal and how did you negotiate it?
I was actually referred to the seller by a guy from my church. I was telling everyone what I was interested in and he introduced me to the seller.
The seller did not have it listed and initially was asking $350,000 for it. He did not want to pay realtor fees. He also had an adjoining lot that he wanted to get rid of. He originally was asking $35,000 for the lot. I offered $345,000 for it as well as $5000 for my broker that I would pay. This allowed me to finance it all less my 15% down.
How did you finance this deal?
I went through a small regional bank. They offered very competitive rates and was willing to lend to me despite not having any other experience. I was able to use a HELOC on my primary residence to pay for the down payment. So I actually got this with $0 of my own money!
Congrats on your first deal! Always exciting taking the plunge for the first time. How is the cashflow on the property?
Good idea taking a heloc. Technically since it is for an investment, it is tax deductible.
Cashflow right now is at $1600 after all expenses, repairs, capex, prop management (I'm doing that myself for now) etc. Cool thing is, they are between $150 and $250 below market so once the current leases run out, should be able to raise that cashflow quite nicely!
@Skyler Wheeler congrats on taking that first step. A lot of people do not do it.
@Skyler Wheeler
Did you talk to the bank and setup the loan process prior to making an offer on the property or after?
Thanks @Cory Wallace
@Brandon Chandler I was basically talking to banks while negotiating the deal with the seller. It was a few day process of course getting down to that price. Meanwhile I was calling around to banks to see what they offered and the terms. Once I decided on the lender, I filled out my personal financial statement and got the property officially under contract.
@skyler wheeler
Makes sense. Thanks and congratulations on your deal! I wish you continued success.
Originally posted by @Brandon Chandler:@Skyler Wheeler
Makes sense. Thanks and congratulations on your deal! I wish you continued success.
Congrats! It's always nice to see others making great moves and I love how you found the seller. Sometimes it's a matter of just letting people know what you do so that opportunities like this arise. Now it's time to plan for the next one! Best wishes!
Congrats! Heres to many more properties!