Turnkey Duplex Under Market Rents with Leases Ending

[Cory Pflipsen]

Investment Info:

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

Purchase Price: $385,000

25% Down Commercial Loan

Past Rents: $2,950/mon

Updated Rents: $3,350

Side by Side Duplex. Both kitchens and bathrooms updated in 2018 with all new cabinets/appliances/etc. New Water Heaters in 2019. New roof in 2020. New Furnaces in 2021. Found out sellers wanted to sell and I made an offer $40k lower than market value for off market and save them commission. Seller agreed to take my offer, plus fix main sewer line sag. So pretty turn key property. Both unit leases were up and I raised rents $200/side.

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

turn-key and everything like new. Also below market rents in place with leases ending soon.

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

Property Management Company

How did you finance this deal?

Commercial loan with 25% down. Commercial loan was over 1% lower than conventional rates at the time.

How did you add value to the deal?

Raised rents.

What was the outcome?

Rental income was $2,950/mon. I'm not bringing in $3,350/mon.

Lessons learned? Challenges?

Shop around for financing. Commercial isn't always higher. Also be patient. The right deal came my way in 2022.

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

Myself