Old Church to Boarding House to Belle of the Block!

[Rachel Chwaszczewski]

Investment Info:

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

Purchase price: $42,000
Cash invested: $60,000

Took existing dilipitated quad plex and stripped it down to the studs and reworked entire floor plan for better flow and efficiency. Created (4) 2 bed/1 bath units on a bustling downtown area that is on the upswing. Utilized 3 for long term rentals and made one into short term rental.

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

This is the type of properties we are most drawn too because they allow for a low buy in and the ability to do a tremendous amount of forced equity resulting in a almost brand new property which will immediately be worth significantly more which allows us to pull out any cash we may have in the deal while having a almost maintenance free property for at least 5-7 years, if not longer.

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

It was listed on the MLS but due to the condition it was not something everyone could take on so we were able to get it below asking price.

How did you finance this deal?

Cash and private money partner for rehab; Asset based lender for perm loan.

How did you add value to the deal?

The property was stripped and reworked. We also added value via the finishes which brought in better rents.

What was the outcome?

We were able to refinance into a long term perm loan and due to the new appraised value we were able to take out equity at the initial refinance after the full rehab and property was rented. A few years later, when rates fell and values skyrocketed, we tapped into the equity again and pulled out a significant amount of money we now lend to ourselves to continue our investing journey.

Lessons learned? Challenges?

Taking on challenges others may be intimidated by is a winning formula!

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

MoFin Lending is our go lender for rehab, new construction and 30 yr fixed asset based loans.