5th investment property

[Anne Keenan]

Investment Info:

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

Purchase price: $159,000
Cash invested: $150,000
Sale price: $365,000

This was a duplex with 5 BR 2 Bath on one side and 2 Br 1 Bath on the other. It was a hillside walkout. I renovated the downstairs and added 4 bedrooms and another bath, FR and Laundry. So now I had a 6 BR/ 2 BA and 5BR/ 2 BA. Home was built in 1959. Separately metered for all utilities.

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

Huge opportunity for Value add. We had tons of refugees coming in from Africa with 7-10 kids and no where for large families to rent. So I created apts for them to rent. The rents were high and long term section 8 tenants. I also saw the lot was huge for the area and that I could subdivide a lot off and sell that too without changing the value of the property. So I did that.

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

in MLS. I negotiated it. I went in on it with a partner.

How did you finance this deal?

Bank conventional with construction loan

How did you add value to the deal?

Added 4 Br and a bath

What was the outcome?

Got super high rents for 10 years.

Lessons learned? Challenges?

Construction costs more than you think it will. Takes longer than you think it will and contractors will bail without notice or not finish their job. Cities permitting process can be difficult. Make friends with the people in Zoning and code enforcement. Pick peoples brains.
Be inquisitive and polite and thankful.

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

Myself. Recommend today Brian Armstrong Keller Williams in S. Burlington, Vt. 802-488-3494.