Accidental "Tree House"

[Richard Mercado]

Investment Info:

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

Purchase price: $136,000
Cash invested: $35,195
Sale price: $274,335

This Duplex was purchased at the tail end of 2019 with one unit remodeled and vacant. Located in a flood zone, the property was ultimately destroyed by a large 100' tall tree which crashed down onto the roof during a storm, practically dissecting both units. After paying Loss of Rents for a year, the insurance company finally settled considering it a total loss.

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

Was looking for small multi family in Durham which was poised for continued growth. This property was less than a mile from city center and was in the path of progress.

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

Found this on on the MLS

How did you finance this deal?

Purchased using a conventional loan 25% down.

What was the outcome?

Between the insurance payout and the sale of the damaged property we were able to net $103,140 on this one.

Lessons learned? Challenges?

Don't buy in a flood zone unless you have great insurance and are willing to deal with a lot of headaches!

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

Jesse Marinez at One Village Property Management was my PM. I would highly recommend his services.