Mix-Use Acquisition & Renovation

[Stuart Udis]

Investment Info:

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

4,000 SF Mix-Use building consisting of three apartment units and 1 commercial space. The building was acquired vacant and will receive updated and separately metered utilities, new kitchens, bathrooms and in-unit laundry. Other capital improvements include a roof deck, new windows, new roof and upgraded common areas. The ground level retail space will be marketed for rent.

Public records indicated the building was only 2,500 SF but contained two permitted additions that were never calculated into the public records square footage. Two of the vacant residential units were already laid out as 2 bedroom units but the 3rd is large enough to be converted into a nicely designed 2 bedroom unit as well.

Anyone who saw this building on the MLS likely dismissed the building right away based on the public record characteristics. The point I want to get across is real estate investing requires physical interaction with property. It cannot solely be done from behind a computer. This building once renovated will operate at a true 9% cap with a 35% expense ratio in an appreciating Class B location but was dismissed by many solely based on how the property was represented online. Get out and walk properties. There are opportunities right in front of you that you are missing out of on if you are behind a computer all day.