Buy and Hold - Turnkey purchase gave us less headache and more buying power

[Alan Asriants]

Investment Info:

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

Purchase price: $381,450
Cash invested: $94,000

We owned 2 properties on this block already and another one came onto the market. The property was owner occupied, well maintained, and was almost turnkey. The best part is that it would be delivered vacant which meant we could rent out at market rent asap. We rented it out at market rent within 3 weeks of ownership and were cashflowing over 10% CoC. Light renovations were done: Paint, garage paint, recessed lighting, and fixed garage frame eaten by termites. total cost: 10k

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

We wanted to own another property on this block. It was already turn key and we wanted to take advantage of the rates right as they were rising.

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

We found it on the MLS. We represented ourselves as agents and offered a very competitive offer with no contingencies.

How did you finance this deal?

We used 20% DSCR financing

How did you add value to the deal?

Slight improvements: recessed lighting, paint, and update garage/basement (paint, and new lighting)

What was the outcome?

We rented the property out fairly quickly and were getting 10% CoC

Lessons learned? Challenges?

Buying turnkey was more cost effective than buying something that needed renovation since every multifamily is sold for a premium regardless of condition. We also faced a situation where the Seller was not honest about Termite damage. After purchasing the property we found severe garage frame damage that needed to be replaced. We also found Terminix reports from the previous owner for termite treatment. Seller paid for the expenses related to fixing the termite damage.

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

Agent: Represented ourselves
Lender: Dmitry Shamis with AMRES
Title: Alpert Abstract LLC