3 Duplex Deal in Pensacola, FL

[Matt Jones]

Investment Info:

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

Purchase price: $305,000
Cash invested: $106,000

3 Duplexes located next to each other a couple of miles from NAS Pensacola. All 2 bed 1 Bath units with central HVAC & W/D connections. Total purchase price for all 3 duplexes was $305k.

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

BRRRR Multifamily deals are exactly what I am looking for so I new immediately when these properties came to my attention that I wanted to try and buy them.

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

My property manager reached out to me to see if I would be interested and I jumped on these immediately. 1 of the 3 duplexes needed a lot of work and I discovered a foundation issue during due diligence and was able to negotiate an additional $25k off of the purchase price.

How did you finance this deal?

20% down commercial loan with a local bank. 5 year term and 20 year amortization.

How did you add value to the deal?

Other than the sheetrock & kitchen cabinets everything in the worst duplex was replaced/fixed/painted. I also repaired the foundation issue. To repair the foundation plus renovate both units was right at $40k but added tons of value to the property.

What was the outcome?

The two renovated units are now renting for $1100 per side. The duplex in the best condition at the time I purchased had tenants that are in a 1 year lease that have yet to expire and rents are a little below market rates, the 3rd duplex had month to month tenants and I raised the rents slightly and will likely do so again this fall. I could, and may, refi this property and pull all of my money back out of it when interest rates improve.

Lessons learned? Challenges?

I did more work personally on this project than I usually do and while I enjoyed being hands on it likely slowed down the work and wasn't the best use of my time.

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

I was my own agent for this deal and Renasant Bank did the financing. I'm happy to share my lenders contact info for those that are interested.