New properties for another year of rehab fun.

[Alex Bacon]

Investment Info:

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

Purchase price: $290,000
Cash invested: $87,000

This was a purchase of 2 very large side by side buildings. The property is a 3 unit, mix use, consisting of two 2x bedroom apartments with one commercial unit on the ground floor in the University of Cincinnati district. It's been neglected both financially and physically which gives us the ability to create an ARV of almost double the purchase price after 18 months.
Unfortunately, due to the market we're in we can only update common space and any random structural issues till summer 2022 when the 21/22 school year ends, at that time the real fun begins.
The 18 month goal with this property is to increase the gross rental income by not only increasing the "per bedroom" rent to market rates but, the plan for now is to also building out the both 2 bedroom units to 3 bedroom units as each unit is extremely large. The commercial unit is also well under market rates, especially for the fact there are two businesses renting the space. Depending on the current tenants staying or leaving with the rent increases, we'll be updating the commercial space for the current business or new businesses coming in.
With the comps in the area and the extensive amount of new construction very close to these properties we project a great return end of 2022 beginning of 2023 with a cash out refi and monthly cashflow.

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

This property is in prime location for my portfolio, it's absolutely enormous and has been extremely neglected. It was brought to my attention with perfect timing due to the completion of my most recent Brrr project being completed and in the process of refinancing.

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

This deal was brought to me by my Realtor while she was working on another deal with a realtor I had purchased a large 6 unit from a year ago.

How did you finance this deal?

This deal was financed conventionally through the back with the down payment coming from myself and a friend and now new partner.

How did you add value to the deal?

Well be adding value trough adding 1 bedroom to each unit and increasing all rents to market rent.

What was the outcome?

It's a new purchase so we'll see next year.

Lessons learned? Challenges?

It continues to be a head ache dealing with the bank but due diligence and staying relaxed knowing it's going to play out the way it should is my general rule.