Purchasing a multi-family with CHEAP rent...

[Cassie Wright, Jr.]

Hi Everyone,

I'm currently under contract for a 4-unit building. All units occupied, all tenants are paying (according to the seller).

Issue: Current rent is $300/month per unit. Average for the area is $600/month (according to Rentometer).

Building is in need of major repairs. Conditions barely livable, according to inspection.

Whats the best strategy for handling repairs and getting rents up to market value?

Thanks.

[Steven Foster Wilson]

Originally posted by @Cassie Wright, Jr.:

Hi Everyone,

I'm currently under contract for a 4-unit building. All units occupied, all tenants are paying (according to the seller).

Issue: Current rent is $300/month per unit. Average for the area is $600/month (according to Rentometer).

Building is in need of major repairs. Conditions barely livable, according to inspection.

Whats the best strategy for handling repairs and getting rents up to market value?

Thanks.

This is where the money is made, buying headaches. Here in Columbus I purchased a 3 unit for $160k that was rented for $650 total, market rent was $3200.......And it needed major repair.

1. We gave tenants 30 day notice, got the building vacant

2. We started remodeling (we went unit by unit, looking back I would have done everything at once to speed it up)

3. We rented for top dollar, getting a total of $$3,650

4. Then we did a refi cash out, getting a $170k check back and still cash flowing about $2k

Its called the BRRRRR method. You should do it. Don't be scared of these headache properties, instead use it to your advantage.