Family Compound: Primary Home and 4 Rental Homes on a Lake

[Sharday Moser]

Investment Info:

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

Purchase price: $280,000
Cash invested: $580,000

We purchase a family compound with 5 houses on the property. One is our primary residence and the other 4 are used as rental properties. All 4 houses needed to be renovated. Three of the rental houses were purchased for $95K each and one was purchased for $320K. Two out of the four have been renovated and are currently rented.

House 1: Before purchase the tenant was paying $900/month. We purchased for $95K, we put about $50K into it, it's currently rented for $2500/month
House 2: We purchased for $95K, we put about $80K into it, it's currently rented for $3500/month

Currently working on finishing the rehabs for the remaining two houses.

This is our forever home family compound, so we have no intention to sell and hope to continue improving and creating new streams of income from the property.

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

We need a larger home for our family, that would be functional for multi-generational living with our kids and our parents living with us.

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

I found it on the MLS. I am a Real Estate Agent so I negotiated the deal myself. We purchased three of the homes with seller financing, one was a conventional loan, and our Primary was purchased with a VA loan. I negitiated $350K off the list price. Our primary appraised for $100K higher than the purchase price, the rental on the conventional loan appraised for somewhere between $20-40K higher than the purchase price. The other homes were seller financed. PP: $280K, ARV $900K

How did you finance this deal?

VA, Conventional, Seller Financing

How did you add value to the deal?

Extensive Renovations

What was the outcome?

We are still working on the final two rental property renovations

Lessons learned? Challenges?

The homes are on septic. In order to subdivide the homes to be able to get a conventional loan we would need to connect the houses to public sewer which is likely to cost $$$. Subdividing may not be an option.

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

Yes, I represented myself in this transaction as my real estate agent.