First Multi Family Rental Under Contract

[Malcolm Grundy]

Investment Info:

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

Purchase price: $137,000
Cash invested: $25,000

2 single family units on the same lot, with a detached garage. Smaller bungalow is currently occupied. Main house in the front needs some rehab, including sewer line replacement. Current owners are negotiating the reduction amounts to counter the repair costs

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

I want multifamily for cash flow and to learn how to scale to larger multi family deals

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

MLS. My agent is familiar with the selling agent.

How did you finance this deal?

Conventional financing with 25% down. I used a PLOC with a local credit union to finance the DP.

How did you add value to the deal?

We will be rehabbing the front house. The current tenant in the bungalow should cover the majority of the initial mortgage to help offset holding costs until the rehab is complete. We will also do minor repairs to the garage to create an additional stream of income

What was the outcome?

still in progress

Lessons learned? Challenges?

sewer lines, electrical panel, roof, and plumbing......all things that would have made me run away from this property. Now i realize all those "issues" are negotiating tools to improve the deal before we get to improve the property.

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

Julie Thorngren via David Ounanian's team with Keller Williams here in St. Louis

[David Ounanian]

Congratulations @Malcolm Grundy!  Way to go man we are really excited for you!

Great lesson for others is to always get a sewer camera inspection.  It can be a costly repair that can't be seen without it.  In this case we are hopeful that we will be able to negotiate a closing cost credit to accommodate for the repair needed.