Off market duplex slam dunk in North Austin

[Vivian Yip]

Investment Info:

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

Purchase price: $395,000
Cash invested: $55,000

We purchased a duplex with a ton of deferred maintenance. One side was in shambles with rats chewing into the abandoned home and full of hoarded items. Exit strategy: BUY/HOLD with one side LTR, other side Mid Term Furnished Rental.

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

Highly distressed home needed work. I wanted a duplex really bad!

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

A former neighbor knows that I am in the business of buying and flipping real estate and she asked me to look at the property. I didn't negotiate it too much because the home belonged to her special needs daughter's Trust. I paid her market value (at the time) less $45k for the renovations needed on the hoarder side.

How did you finance this deal?

Since I knew the seller, she was able to give me enough time to get a conventional mortgage on it. I paid a 25% downpayment.

How did you add value to the deal?

Spent $55k to complete renovate the home including electrical, plumbing, windows, floors, kitchen, appliances then furnished the property.

What was the outcome?

Phenomenal outcome. The property increased significantly in value and since it is rented out as a mid term rental, I am able to get market rent on one side (LTR) and 2x rent on the other - I am able to cash flow on this property.

Lessons learned? Challenges?

Lots of money spent on overgrown trees that I didn't factor into my calculation as much as I should have.

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

No.

[Vivian Yip]

Quote from @Maksu Ize:

Where's the slam dunk

I see a duplex for 400k, with no numbers

 You're right! first time using this thing.
PP:  $395k
Reno:  $55k
Mortgage/Insurance/Property taxes:  $2230

LTR Rent:  $1465

MTR Rent: $3800 less $250 utilities

Total Rent Income:  $5015

Net monthly cash flow: $2,785. After nearly a year of furnished rental, I have only had about 14 days vacant. However not without effort. Austin mid term rental is becoming saturated. I take a lot of time networking with Realtors.

I did not refinance because I left my corporate job right after I bought this and working on re-qualifying myself for conventional loans. Otherwise I am happy just leaving as is because the interest rate is low. I'm not in a hurry to cash out.