Preserving Historic Charm

[Renae Bouchard]

Investment Info:

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

Purchase price: $300,000
Cash invested: $100,000

The purchase and renovation of this original owner 1930's 3-family was purchased with a 1031 Exchange. We updated the electrical and insulation throughout the entire building, renovated the kitchens and bathrooms of two units and rebuilt the exterior rear staircase. This building is centrally located and recent assessment of comps conservatively suggests market value at $500k.

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

1031 forced our timeline to close on a property, we were looking to park our proceeds in as much house with value add potential as possible. This will be a property we own for generations, and the lot has upside potential.

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

Listed in the height of the 2021 RE market, this open house had cars clogging the side roads and driveway. We offered 20k over asking, a cash purchase and 10 day close.

How did you finance this deal?

1031 Exchange and personal funds from a HELOC on another property

How did you add value to the deal?

Property needed maintenance and cosmetics. Red carpeting throughout, which when removed, revealed impeccable hardwoods.
The stuff of dreams. We overhauled the attic apartment which was not livable in its current state and have furnished the unit for traveling professionals. Lot is large enough that we plan to add another unit or two over a garage down the line with equity in the deal.

What was the outcome?

We love the charm of this property and its central location. It will be a home we hold generationally.

Lessons learned? Challenges?

We put a lot of money upfront into this house - we purchased it with cash and refinanced immediately to fund the renovations and pay back the heloc we had. Having a great relationship with a banker is the only way this purchase was able to happen.

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

LA Pete Duval was a nightmare to deal with.