Four Family Value Add

[Lynne Hart]

Investment Info:

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

Purchase price: $465,000
Cash invested: $125,000

Four Family Property bought in an exchange, was in fantastic condition with just one unit that needed to be made rent ready. Updated cosmetically, added in unit laundry and new appliances. One is a furnished corporate rental and the other three are market rate unfurnished rentals, right in the heart of St. Louis's Central West End neighborhood, walkable to various hospitals, educational institutions, and the cortex, which is an innovation incubator.

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

The location is superb and the price was perfect for the area, where there are a limited number of multifamily buildings. There was a comp that was just a little better in condition that was a $650k sale within 1 year.

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

I'm a realtor and an investor who works for realtors, and so I always have my eyes on things coming to market. A colleague listed this and I had it toured and contracted on the same day.

How did you finance this deal?

Funds from a 1031 exchange and conventional financing.

How did you add value to the deal?

Cosmetic updates, some new windows, tuckpointing, new doors and just raising the rents where they hadn't been raised in years.

What was the outcome?

CASHFLOW!!

Lessons learned? Challenges?

We had a surprise at the end when we were getting ready to re-rent and had gas leaks in all of the units. We aren't sure what the cause was but had to rerun lines that were leaking, even in use!

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

Tons, and I do all the time.