Wynwood duplex up-zoned to T5-O mixed use & 1031 Exchange

[Jai Magner Koch]

Investment Info:

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

Purchase price: $230,000
Cash invested: $57,500
Sale price: $980,000

Property was new construction at time of purchase and never needed any improvements during ownership. I sold the property as the deferred maintenance was going to become an issue. Fortunately, the land value increased significantly during ownership. When I purchased the property in Wynwood it was before what we know now as Wynwood existed. Nothing of interest was there and this lot was upzoned during that time from duplex to T5-O, mixed use residential and commercial up to 5 stories. Property was sold as is for land value to be developed. I was able to do a 1031 exchange and buy 6 townhomes and lot in Nashville. The Nashville property appraised $422,000 above the purchase price and had immediate equity. The timing of the Nashville buy was excellent as now the market is hotter than ever and the property is worth more than double what I paid in 2018. The cash flow is insane!

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

Saw the potential in the neighborhood that was not yet up and coming but the location just seemed like a no brainer.

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

I found this deal through traditional methods as it was listed in MLS.

How did you finance this deal?

Personal loan for investment property, non-owner occupied.

How did you add value to the deal?

It appreciated in value significantly due to the neighborhood. Never put any significant money into the property.