First Multi-Unit, Feeling Good!

[Noah Lomax]

Investment Info:

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

Purchase price: $1,100,000
Cash invested: $245,000

We found a multi-unit on the MLS (Legal 3; non-conforming basement). The property had a lot of deferred maintenance, but beautiful bones and solid tenants. With the leases all up for renewal within 3 months of closing, we presented each tenant with an option of staying while we made upgrades to their unit with a minimal increase to their rent when the work was finished. In our first year, we saw a 24% CoC return on investment, minus the investment to unit improvements.

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

I was looking to re-invest money we made on a flip into a strong cash flow property.

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

I found this on the private MLS. We used the rising mortgage rates and changing Covid landscape to negotiate with a seller who didn't want to go on the open market.

How did you finance this deal?

Investment Loan

How did you add value to the deal?

Applied to get the basement unit legalized; added laundry to all units.

What was the outcome?

Generating great CoC in the first year with the second year projected to deliver 29%.

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

Nick Libert at Exit Strategy, Aaron Schaler then at Nexus Mortgage. Both are PHENOMENAL!