The Beginning - Tacoma Fourplex
After 22 months of reading practically every book BiggerPockets recommended, I purchased my first property and had no idea what I was doing. The numbers are important, but the story behind those numbers is important as well:
We made seven offers with a residential real estate agent and even made some below-asking offers. For context, in 2018 Tacoma, nothing was going below asking.
We switched to a multifamily-focused agent, and our next offer was accepted! The agent offered $10,000 to the seller to immediately take the property off-market, and the seller took the bait.
I was a Platoon Leader, Marcus was an Executive Officer, and our units were constantly training. We would have maybe a week together before one of us had to go to a training exercise. It was the ultimate test of our trust because we had to make offers without the other person seeing the property.
Underwriting
Marcus and I both underwrote this deal using the BiggerPockets underwriting calculator. Since then, we’ve moved on to our own calculators, and it reminds me of how we went to the moon with limited technology but still made it happen.
Business Plan
Our plan was very straightforward. We would move into a vacant unit, slowly renovate it, and then renovate the remaining units as tenants moved out. As you know, no plan lasts first contact with the enemy, but regardless, having that plan helped us steer through the uncertainty. Here are a few of the events that disrupted that plan:
Shortly after closing, a tenant fell through the rotted deck that the previous owner had been patching. Quotes to replace the deck came in 2x what we expected, so we replaced the entire three-story deck ourselves.
One tenant moved out when we purchased the building, and her friend immediately moved in without us noticing. Since we didn’t know any of the tenants, we didn’t realize the switch happened for months. Luckily, that new tenant kept paying rent!
The Army moved Marcus to Texas a few months after closing leaving a large part of the renovation process to me. Marcus did provide support from afar, including completing the entire permitting process and flying up when he could.
Outcome
I am so thankful for this deal and have to rate it 5/5 stars. Not everything went great, but the lessons we learned set the foundation for our real estate careers. Here’s what I would change based on what I know now:
Starting with an investor-focused real estate agent would’ve netted us a deal much quicker.
I renovated the first unit with our taste in mind, and while I enjoyed it, I probably would make it tenant ready from the jump so I wouldn’t have to spend money renovating it twice.
