Updated almost 5 years ago on .
The Minnesota House - Our first investment property
Investment Info:
Small multi-family (2-4 units) buy & hold investment in St. Louis.
Purchase price: $144,000
Cash invested: $45,000
A 110-year old 4 family in the Mount Pleasant neighborhood of St. Louis, MO. This house boasts a large backyard that backs up directly to the neighborhood Mount Pleasant park and is a top drawing property amongst our rental tenants. It has four 1500 square foot apartments, each with 1 bed and 1 bath. Large living spaces. And laundry included. Our tenants enjoy included utilities and internet for simplicity for shorter leases, and easy access to all the city's main attractions and travel corridors being only 4 blocks from interstate access, and less than 10 minutes from downtown. As well as within 1/2 mile walking distance of public transportation.
What made you interested in investing in this type of deal?
This was an off-market deal which was perfect as our first investment opportunity as we kept being out-matched at the table by cash offers by veteran investors and teams in the area.
How did you find this deal and how did you negotiate it?
We were quick to assess the property with a thorough inspection and after some research leading us to find out the owner was looking to offload the property quickly we were able to acquire the property for $144,000 when it was slated to go to market for $165,000
How did you finance this deal?
We made use of our FHA putting minimal money down to get the property in shape quickly to rent. We also lived there during the renovation process to lessen our personal living costs and put more time into the property. This allowed us to quickly bring the building up to standard for us and we welcomed our first tenants within 30 days of beginning renovations. The building has been full nearly the entire time we have owned it.
How did you add value to the deal?
The building was a bit outdated and in need of repair upon closing. We updated kitchens in some. Put new appliances in as well as washers and dryers. Replaced all the windows in the building for added security and power savings. Replaced the front doors to up the curb appeal as well as did some yard work and replaced the front top steps to the building. We installed all new air-conditioning units and furnished all the apartments for the ease of our guests.
What was the outcome?
The property has been a blessing to us as it has remained full nearly the entire time we have had it. Our renters enjoy the added benefit of our hotel style accommodations with furnished units and utilities, internet, etc included so have left us fantastic reviews and kept our word of mouth business growing. We see requests for booking weekly for all 4 units.
Lessons learned? Challenges?
As we have done most of the work on the property ourselves we have learned much about plumbing and electrical systems and just how these old homes will never cease to surprise you with what may go wrong next.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
We worked with Garcia Properties in St. Louis, MO for the acquisition of the property. They do everything in house from finding the property to finance and guided us through every step of the process to make this an easy and profitable venture.