Residential home converted into a two apartments

[Bob Conrad]

Investment Info:

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

Purchase price: $250,000
Cash invested: $40,000

Took a three bedroom ranch home and converted into two separate apartments with two tenants. One bedroom upstairs and two bedrooms downstairs. Converted the stairway into storage for the upstairs tanant. Nice big level lot for this older home built in 1980.

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

Found home on Zillow. Wanted $299 and I offered $250.

How did you finance this deal?

Hard money loan through community bank.

How did you add value to the deal?

House was in bad shape with outdated carpeting, wallpaper etc.... Gutted the home and updated all appliances, hardwood floors, paint etc. Added an additional kitchen downstairs with family room and two bedrooms. Still continuing to work on this house as the deck now needs replacing...

What was the outcome?

Rented with two different tenants getting $1700 month. I pay all utilities and are reimbursed each month.

House is completely paid off!

Lessons learned? Challenges?

Always over estimate upgrades or flips. Find a good, quality, reliable handyman to help with repairs.
Don't get into rental properties unless you want to get your hands dirty.... Always screen or vex your tenants, check their references and make sure they have a good job.

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

I did this on my own....