Investment Info:

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

Purchase price: $225,000
Cash invested: $40,000

This was my first multifamily investment deal. A 4 family in the St. Louis Hills area.

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

I was interested in this type of deal because of the potential to add value to the property and refinance out my rehab costs and down payment using the BRRRR method (Buy, Rehab, Rent, Refinance, Repeat).

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

I found this deal from a new investor I connected with on Bigger Pockets. He had never done a deal before and had a lead on this property from a family friend. I coached him through negotiations with the seller and met him at the property to help him make an offer. In the end he ended up wholesaling the building to me and made $10,000 for himself while I got a great deal on a 4 family in a nice part of town. A true win-win.

How did you finance this deal?

I used a bank to fund 80% of the purchase price and 100% of the rehab. For the 20% downpayment I used a HELOC. 6 months later I refinanced the property with a 75% LTV 30 year fixed rate loan.

How did you add value to the deal?

I updated bathrooms and kitchens and painted throughout.

What was the outcome?

The outcome was a property that now appraises for 100k over what I have into it (price + rehab).

Lessons learned? Challenges?

I learned how to deal with existing tenants. I gave them options for staying at a increased rate or the option to move. Once a tenant moved I began renovating that unit.