SFH to Tri-plex

[Thomas B.]

Investment Info:

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

Purchase price: $99,000
Cash invested: $130,000

1947 SFH 2/1, previous owner converted the single car garage into 1/1 apartment and a portion of detached 2 car garage into an efficiency. Extensive renovations mostly complete, just needing interior finishes. Plan to rent through Sec-8 due to neighborhood demographics, proximity to bus line, etc.

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

Cashflow.

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

Bank-Owned property. Previous owner passed away. In retrospect, I should have stuck to my initial offer of 60K, knowing it needed foundation, roof, and electrical. Got emotional when they said there were other offers higher than mine. I think realtors are out-right lying when they use this line... If not, I'll still stick to my guns next time.

How did you finance this deal?

All cash, using funds from a HELOC on my primary residence. I retrospect, this was a mistake since I am now in a cash crunch at the end of renovations. Next time I'll use Hard money lending for the initial purchase.

How did you add value to the deal?

New roof, foundation repair, and updated the electrical. Extensive renovation.
Bought as SFH, going to rent out as tri-plex. Sec-8 rents beat open market rates and the waiting list for prospective tenants is huge.

[Robin Simon]

Nice looking deal - gotta have multi units to cash flow in this market!