First Deal = Quadplex!

[Kevin Brenner]

Investment Info:

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

Purchase price: $350,000
Cash invested: $20,753

Just closed on my first 4-Plex in Savannah, GA. I found a great deal (used my VA) from a wonderful older woman who was simply looking to get out of the land-lording business (after 30 years)! The building has a ton of historic charm and I look forward to rehabbing the units to provide a better quality of life for my tenants.

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

I knew that the VA would allow me to purchase up to a 4-unit property costing up to $453,000 with 0% down! I prefer MFH versus SFR because I'm able to multiply my cash flow while keeping my CapEx relatively small. It's a dream come true.

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

I found this deal driving for dollars and scouring the MLS. Savannah (and the south in general) has a ton of small MFH properties. A lot of them were built in the 50's and 60's and need some TLC. I found the deal and worked with my agent to negotiate a "fair" price. In retrospect, I probably should have come down a bit based on it's current rent roll and appraisal and not future/potential rent roll. Chalk that one up to a rookie mistake.

How did you finance this deal?

VA 0% down. I bought this Quad for $3500 out of pocket!!!

How did you add value to the deal?

I rehabbed the common area, added a washer/dryer hookup to units that didn't have one already, reglazed all of the exterior windows, repainted the exterior, added functional off street parking for 4 cars, and rehabbed all of the units.

What was the outcome?

The first unit rehab is almost complete. I'm expecting to land a tenant in there paying $1200/mo by the end of December (that's a $525/mo jump from the previous tenant - and no I'm not evil, it's well within market rent)! The next rehab starts in January and I hope to have similar results in February!