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Updated over 2 years ago,
New Orleans 4-plex -> STR Conversion... home hacking done right!
Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $435,000
Cash invested: $43,500
4-plex outside of the French Quarter New Orleans purchased May 2020
$3250/ month long term rent at purchase -> 6 months later -> $5200/ month rent
May 2021 conversion to STR $20k worth of furniture and $20k worth of CapEx -> $11k/month NOI
What made you interested in investing in this type of deal?
I had managed roughly 10 other short term rental units for 3 years until May of '20
How did you find this deal and how did you negotiate it?
It was on the open market in May after the pandemic first wave ended and then saw this hit the open market, I knew what it was worth and I knew that the listing agent had it way underpriced. So I priced it where I thought was fair... and negotiated them down in the inspection period!
How did you finance this deal?
10% down for Private money so I could quick close and conventional lending was giving me problems... 13% interest made me figure out conventional pretty quickly though!
How did you add value to the deal?
The backyard was a wreck... and I knew I could sweat equity clean it up and show the tenants I was improving things... and then negotiated a rent raise across the board to almost double what it was when I bought it!
What was the outcome?
After another 6 months I started to convert the units into short term rental... and know I bring in roughly $11,000 in NOI!
Lessons learned? Challenges?
My biggest regret is that I didn't take great notes of the conversion process, what my exact CapEx was and that I didn't capitalize on momentum to then syndicate more short term rental deals!
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
If you think you have a deal like this.. and want a second set of eyes - I am a real estate professional and am well versed in short term rentals. Message me with your deal and id love to help you out =]
