My 1st deal. What an experience!

[Mordy Chaimovitz]

Investment Info:

Townhouse buy & hold investment.

Purchase price: $500,000

Off market deal for two attached townhouses. Private investor brought cash to close. I brought the deal. 50/50 split on cashflow and equity. ARV of punch list of sellers rehab which I took over should bring a nice ROI.

Currently renting it out.

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

I knew the seller was very motivated

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

Seller was someone I knew from the area.
I negotiated it by giving my offer.
The seller didn't even bother to respond as it was much lower then he had in mind.

My Mentor suggested that I call back and ask him what he had in mind without changing my offer. Turns out we were 100k apart in price!

I was advised not to budge in price (not that it mattered as we were not even in the same ballpark)

Six weeks later out of the blue the guy called me that he accepted my offer!

How did you finance this deal?

Private Investor partnered with me 50/50. He provided downpayment and additional expenses. Then I took out conventional residential loan on the rest. I brought the deal to the table and managed the transaction and am managing the property.

How did you add value to the deal?

Put new boiler ac and furnace in one unit. Totally re did the landscaping. Changed floors in the bathrooms. Put on stainless steel appliances. And some other punchlist items leftover from the sellers unfinished rehab job.

What was the outcome?

Rents in the area have increased significantly since I underwrote the deal. I am very close to getting tenets in there. And it's looking promising

Lessons learned? Challenges?

When taking over someone's unfinished work. Be very very clear upfront what you expect the seller to finish in order to close. The last few weeks before closing were very stressful. We were very close to breaking the deal a day before closing.