Hello everybody, welcome back to another podcast episode! This week we are walking you through each of our 2nd-ever deals, which were both coincidentally multi-family properties. We are sharing our experience with how we found the deals, the ways we financed/purchased the deals, how we handled inherited tenants, and what we’ve learned since. Let’s get started!
Amelia’s First Multi-Family Property
Amelia purchased her first multi-family property, a fully occupied quadplex, in December 2020. She happened to purchase this deal from the same seller as her first deal which made things super simple since she had already worked with them before. The property had two units with 1 bedroom/1 bathroom each, one unit with 2 bedrooms, and one unit with 3 bedrooms. To purchase, she put down 20% of the $135k purchase price on a 20-year amortization with 4.5% interest.
Since this property came fully occupied she has trained the tenants on her processes and also learned a lot from them as far as how to get inherited tenants on board with the processes of having a new landlord. One of the tenants ended up moving out when she initially raised the rent, but the other three are still living there 2.5 years later and keep their units in excellent condition so she is in no hurry for them to leave.
This property is one that Amelia really doesn’t have a need or desire to sell unless something amazing came along.
Grace’s First Multi-Family Property
Grace purchased her first multi-family property in April 2021, on a referral from her uncle. It was 2 duplexes, all of which were fully occupied. The properties were in a good area and all in good condition. Three of the occupants were families and one was an insurance claim tenant.
To finance this purchase, Grace went in on the deal with her boyfriend and her sister, splitting the down-payment three ways and she even talked her local bank down to only 10% down on a $255k purchase price, due to the built-in equity she saw the property had.
They self-managed the property and decided to rehab one of the units into an MTR to rent at $1,600. Now two of her family tenants are still there, one has turned over and Grace plans to keep this multifamily basically forever.
One lesson Grace has learned from this particular property is that up/down duplexes are vastly different than side-by-side units.
This is a great learning episode because we are sharing so many of our personal lessons learned, the ways we have lost and saved money on multi-family properties, and why it’s so important to spend time placing good tenants, rather than just taking the first applicant you get, and also why you should keep good inherited tenants rather than risking the costs associated with vacancies.
Thanks for listening, catch you next week!
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