Velocity of money, return on equity

[Emanuel Blando]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $574,000

Used a cash-out refinance from a rental portfolio of 5 single-family homes and used that money to buy 7 more doors in the same neighborhood. Got the 7 property portfolio from one seller in a package and got them at a great discount.

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

Increasing my portfolio by 140% in one transaction.

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

Was the buyer's agent for the seller years ago. When the client called me ready to sell I happened to be in the market. I only wanted 5 out of her 9 properties due to the condition of some of the homes. I was able to sell 2 out of the 9 to a flipper client and then agreed to buy the remaining 7 including the 5 better properties and the 2 others. I got a deal on it because I solved the seller's problem of liquidity. She wanted a quick sale of all 9, and could not take the time to sell 1 by 1.

How did you finance this deal?

I used a cash-out refinance from an existing renal portfolio.

How did you add value to the deal?

The rents were under market value at purchase. Whenever there is a vacancy or lease end I rehab the property and put a section 8 tenant at full market rates.

What was the outcome?

Doubled cash flow overnight.

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

Negotiated and brokered the deal myself.