2 duplexes on one lot

[Eric Larson]

Investment Info:

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

Purchase price: $135,000
Cash invested: $13,500

This is just a simple set of two duplexes on one lot in the hometown of Smucker's and Jiff. Older duplexes but with a number of improvements over the last few years. Rents are low now, but that will be brought up to speed.

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

They are in reasonable condition, cash flow well and have had a stable tenant base for a decade.

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

I've worked with the former owner on deals in the past and this one fit both of our needs.

How did you finance this deal?

We did owner financing for 24 months with a balloon.

How did you add value to the deal?

Rents are below market now. Tenants have all lived there between 2-30 years, so rents can be pushed up. Condition is also fine now, but can be improved over time.

What was the outcome?

So far this is a good situation for everyone.

Lessons learned? Challenges?

This is just the second set of units that we have intentionally increased rents prior to tenant changeover. Communication and directness are helpful in easing emotions.

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

I am an investor and a Realtor.