Getting started: 4-plex (2 duplexes) in Valdosta, Georgia

[Michael Ronn]

Investment Info:

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

Purchase price: $192,900
Cash invested: $68,225

This property is two duplexes (4 units) with each duplex having a 2/1 and a 1/1 unit. Purchased with 3 or 4 units rented ($525 for 2/1 and $425 for 1/1s) and the 4th unit requiring significant renovation (subfloor rotted) with no current renter. Overall rehab ongoing and estimated $20k cost. Plan to refi after renovation complete and renter in place (est $695 for 4th unit post rehab).

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

I am interested in stacking multi-family properties every year or two as best I can. This is my first mulit-family purchase

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

I found it by calling a local broker to ask about another deal he had listed on the MLS.

How did you finance this deal?

I financed it with a commercial loan at 25% down and 4.75% interest. 15- yr amort. with 5- yr term.

How did you add value to the deal?

By renovating the unit with the damaged subfloor and adding basic improvement to it and each of the other units as they come open, I plan to add 25-35% additional value in the next year or two. A cash out refinance is optimal with reclaimed dollars going into next property purchase.

What was the outcome?

I just closed and am beginning the joys of problem discovery in the reno. The floor is really bad in my empty unit. Budget may go over considerably...don't know yet.

Lessons learned? Challenges?

Will update this in the near future...

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Agent - John Courson (First Commercial Real Estate - Valdosta)
Lender - Travis Hill (Southwest Georgia Bank - Valdosta)
Property Manager - Leanna Pledger (Wiregrass Properties - Valdosta)
Insurance Agent - Wesley Tyus (Tyus Insurance Group - Hamilton)
Attorney - Jennifer Walker (DoverMiller - Valdosta)