TRULY A DIAMOND - HARDEST PART WAS NOT OVERSPENDING

[Kevin Quat]

Investment Info:

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

Purchase price: $415,000

Purchase this single family cottage with a tree through the roof and a tarp on it. Luckily, no structural damage and it came with two just as tired accessory dwelling units. After a year, refinanced, pulled all cash out. It has positively cashflowed always and whats more is the location, 1/2 acre of downtown Bluffton. There's more to the story about how I found it, what I did to it, and how I have gotten it to perform. Happy to share.

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

Three units, live in one, generate income on two. Then when I out grew it, all three are revenue producers.

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

Started low, they did not know the value. They got me up. But I was able to roll in 80% of my repairs once I had a loan commitment.

How did you finance this deal?

Due to a divorce, I had to go commercial with a 2nd mortgage offered to an investor. I paid him off early, quit claimed the deed, refinanced, pulled out all of my cash, left it with a 30 year fix, cash flow time.

How did you add value to the deal?

By not over building and by having a vision for the space and knowing the location was going to be amazing.

What was the outcome?

The site is worth, based on recent comps, $1.4m but I would not sell for less than $2m. It is truly the best location and with the town building a park behind it, the Bridge coming across Green St, it is about ready to be developed.

Lessons learned? Challenges?

I wanted a metal roof, doormers, solid stone cabinets, new porch, but none of that was needed. I made it habitable for myself and now it is a 5 star AIRBNB property with constant bookings. The carriage house (furnished with older furnishings and never renovated) is getting north of $2k a month on 569 sq ft. The downstairs unit has a great deal and while I could get more, I am only a good manager for others, I am a sucker for a retired vet.

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

I was my own agent, now broker.