Ugly but profitable buy and hold.

[Rachel Hutton]

Investment Info:

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

Purchase price: $275,000
Cash invested: $80,000
Sale price: $275,000

Got a lead on a lot with two small ramblers on it. Both need some work but are habitable and rented full time.

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

Purchased houses about 80k under market value and they have both an ARV and future CAP rate well above that so it makes sense.

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

A friend and fellow agent knew the home owner and I talked about it with them and we came to a fair price for the condition.

How did you finance this deal?

Conventional financing.

How did you add value to the deal?

So far we have done some mold remediation and small plumbing fixes. At turnover I will be doing cosmetic renovations on both and will replace septic in the next 3 years or so.

What was the outcome?

We are currently profitable with the future forecast only having us being more so.

Lessons learned? Challenges?

The only challenges have been trying to get repairs done with tenants in place.

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

I worked with Fairway Independent Mortgage for this one and they were amazing. I represented myself as the buyer and my good friend, Samara Dinnius represented the seller.