Lincoln Park Buy & Hold

[Brittany Kuschel]

Investment Info:

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

Purchase price: $145,000
Cash invested: $60,000

Buy and Hold Fixer Upper Duplex (owner occupy while renovating) - Currently renovating upper level unit to offer fully-furnished month to month. Lower level unit is renting for 950/month plus tenant pays electricity.

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

We were looking for a value-add multi-family that we could live in and improve while we continued our house hunt for a primary residence. I LOVE multi-family!

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

I am a licensed Realtor and the seller contacted me because she was interested in selling it.

How did you finance this deal?

We used conventional financing. Unfortunately, because we were unwilling to sign loan documents to commit to live in this for 12 months, the lender required 25% down.

How did you add value to the deal?

We re-painted the interior top to bottom, re-painted some exterior. We refinished the original hardwood floors (under carpet), added some new appliances, new countertops, some new windows. We improved the basement with epoxy floors and painted walls. We are now adding value in the upper level by adding back in a kitchen (had been stripped out by prior tenant), we have renovated the upper level bathroom, and bringing some of the original charm back into this property.

What was the outcome?

TBD (so far, so good)

Lessons learned? Challenges?

Don't try to rent a 4 BR at the last minute while 8 months pregnant. For us, another lesson learned is that we prefer to use a property manager. We also are renting slightly below market rent, but this allowed the property manager to cherry-pick an amazing tenant for the lower level.

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

I am a licensed Realtor. I handled the paperwork for the transaction. I highly recommend Mark Anunti with Bell Bank for my investors financing needs.