Crittenden KY 6 unit BRRRR

[Jacob Neumann]

Investment Info:

Large multi-family (5+ units) buy & hold investment in Crittenden.

Purchase price: $240,000
Cash invested: $150,000

This was a 6 unit project that was in need of everything, but was built in 1996 so all of the major systems (plumbing and electric) were good. We installed all new HVAC (heat pumps for all 6 units), windows, appliances, kitchens, floors, doors, fixtures, and water heaters. All utilities are separate even the water making the true NET cashflow great. We were all in to this project for $390,000 and refinanced upon completion. It appraised for $665,000 and we did a 75% LTV loan.

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

The building was very distressed and under valued.

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

We found this through our own wholesaling business lead generation system.

How did you finance this deal?

At first with a bank loan and used all cash for the improvements we then refinanced the building once the renovation was complete.

How did you add value to the deal?

We added value through the renovation and driving rents.

What was the outcome?

We refinanced the building and made a profit with the refi money and the building still has ample cash flow on a per door basis.

Lessons learned? Challenges?

We learned that a hard money loan would have been better to use. We had a lot of our own cash tied up for a while.

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

We worked with Ross McLain who is a broker that I'd refer to anyone in the NKY/ Cincinnati area. He does great work!