Duplex in Philadelphia

[John Walter]

Investment Info:

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

Purchase price: $225,000
Cash invested: $80,000

Purchased a duplex that had fallen out of contract with a wholesaler. One unit was newly renovated and the other was completely trashed. Remodeled that unit down to the studs, which took about five months (after I had to fire the first contractor). Both units are now rented to happy families and I could not be happier.

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

Significantly lower taxes and purchase price than my home state. That, and my real estate group all started looking in this area so I had others to join the journey with me.

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

I had a real estate agent. In Philly, wholesalers often place their "deals" on the MLS. My broker reached out to the wholesaler and we submitted an offer to them. Their contract expired a few days later (after not responding to the offer) and we ended up reaching out (and buying) directly from the seller.

How did you finance this deal?

I used an investment property loan and funded the downpayment and rehab with my savings.

How did you add value to the deal?

Rehabbed one unit from top to bottom. This was one of the worst units I had ever seen; it had missing fixtures, holes in doors wood that was rotted. My (second) contractor fixed everything and brought the unit up to modern standards.

What was the outcome?

Two beautiful units that anyone would be comfortable living in.

Lessons learned? Challenges?

Biggest lesson was not hiring the correct contractor the first time. Communication was awful the entire time. This was an out of state purchase so I relied on photos/videos, of which he refused to share. After the third time he told me it would be two more weeks, I finally let him go. The next hire came from multiple referrals and he did an amazing job. I know use him for everything and recommend highly.

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

My real estate agent and contractor were both fantastic. Feel free to reach out for their contact information.