1031 exchange success

[Kelli Huang]

Investment Info:

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

Purchase price: $520,000
Cash invested: $130,000

Rents $890-1050.
still stabilizing rents.

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

I have always wanted a quadplex.

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

My agent that I was looking for a owner-occupied single family, brought it to me. I never purchased that single family and bought this quad as an investment instead.

How did you finance this deal?

30% down conventional. interest rate 4%. No escrow.

How did you add value to the deal?

Move-in ready. No work needed. Evicted a tenant first month of closing due to the seller stuck a non-qualified tenant in there right before closing.

What was the outcome?

$3850 rent. $1860 PI. $450 TI. $385 PM. $150 utility. $385 CapEx + Vacancy.

NET= $620 a month.

Lessons learned? Challenges?

Did not get estoppel letters from tenants and seller, causing me not able to evict the non-paying tenant via court.
Luckily that tenant left on her own.

Difficult seller. Need a stronger agent next time.