4 Plex House Hacked for first Multifamily Investment

[Nick Atwood]

Investment Info:

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

Purchase price: $310,000
Cash invested: $20,000

Purchased this property with an FHA loan back in 2015 3.5% down. Spent less than 20k to close the deal, and lived there the first year rent free, since the other 3 units more than covered the mortgage. Then 5 years later, with remodeled units I've raised the rents from about $750 to $1000 a month. The property appraised at almost double the price 600k. It's generating greater than a 50% cash on cash return annually. I've also used a cash out refi to purchase another investment property.

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

This was outside of the expensive PDX metro market, rents were higher proportionally than elsewhere, so the cash flow potential was a lot higher.

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

I found this deal online, it was posted on the RMLS. I negotiated it down a little before contract, and during inspections.

How did you finance this deal?

FHA Loan

How did you add value to the deal?

I slowly remodeled the property with funds from the cash flow.

What was the outcome?

The outcome was that I have a $2200 mortgage payment, utilities are minimal (

Lessons learned? Challenges?

I learned that there was a shared driveway that I owned, so I was able to make some money off a revocable easement. There were some headache repairs such as a plumbing leak that had been there for a while, some roof issues, and poor bathroom fans that contributed to common mold in our area.

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

I worked with Minuteman Mortgage on this deal. We were in a time crunch, and he closed the loan super quick.