First Off-market Duplex with Partner

[Chris Momongan]

Investment Info:

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

Purchase price: $65,000
Cash invested: $40,000

Formed a 50/50 partnership with me being the sweat equity. Found off market deal and close on duplex. It is est 165k all in and expected ARV 220k and up. Plan to do MTR both units or mix of MTR/STR/LTR for both units. Est rent roll is $2950 as MTR and cash flow of $1000. Have construction loan and will refi cash out into 30 year.

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

To scale using OPM. Needed to slow down and create reserves for personal finances and saw a partnership as solution.

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

Using wholesaler and bid 65k when open bid was 55k.

How did you finance this deal?

Construction loan with private bank

How did you add value to the deal?

I am the sweat equity. Found deal and has team of contractors and vendor to complete rehab from previous experience. Also will be property manager for MTR units.

What was the outcome?

Closed on deal and currently in month one of project

Lessons learned? Challenges?

Dealing with lawyers to set up partnership has been challenging. Also, used lender on off-market deal was an experience when most use cash.

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

dealt directly with attorneys and lenders to get the deal closed.