Short/Mid-term Triplex on Cathedral Hill

[Adam Tafel]

Investment Info:

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

Purchase price: $884,000
Cash invested: $176,800

Luxury triplex in Class-A St Paul neighborhood. Mix of mid term and short term units. Self-represented in the sale, financing with Lowell Collman with Citizen's Bank.

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

We needed a new family home with our growing family, but didn't want to buy a single family and pay our own mortgage.

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

One of my clients sent me to the building because they were interested in buying it. I walked the property with my wife during an open house, we were both so impressed. We had been renting down the street after converting our SF home into an Airbnb rental, so we were able to walk to the open from home. Anyhow, I strongly advised my clients to write an offer, it was everything they were looking for. They decided against it - and so we threw out hat in the ring - and we got it!

How did you finance this deal?

20% down owner occupant, portfolio loan with Citizen's Bank, 3.7% 30 year amortization fixed for 15 years.

How did you add value to the deal?

We re-plumbed the upper unit, replaced most of the windows, and a handful of other fixes. The two rented units were bringing in 2600/mo when we bought the place - now those same two units rent for a total of 4995/mo, with the third unit renting for 3300/mo.

What was the outcome?

We now live in a single-family home in Highland and this triplex pays a good chunk of our mortgage. We will continue to make little improvements but have no big projects planned - maybe a studio space above the garage if the city would allow it.

Lessons learned? Challenges?

Go with your gut. We weren't planning on making a big purchase, but it felt like the right thing to do. We didn't inspect the place (not that I can professionally advise that) because we just knew the type of seller we were buying from. We were correct in that assumption, it's the most solid building we've ever owned.

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

Repped myself, Lowell Collman handled the financing and did a spectacular job.