Newly Renovated Duplex with Versatile Rental Potential in Morganton, NC

[Mitchell Coles]

Investment Info:

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

A newly renovated duplex, offering two ready-to-rent units: a one-bedroom, one-bath unit, and a two-bedroom, one-bath unit. This completed project adds value to the Morganton rental market with its modern updates and versatile use. While currently unrented, the duplex may serve as temporary housing for tenants from a nearby commercial property I also own, which requires repairs. This property showcases strategic planning and flexibility within my investment portfolio.

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

I was interested in this deal because it offered the opportunity to convert a single structure into a duplex, maximizing rental income and property value. The location in Morganton, with its growing rental demand, made it an ideal candidate for this type of investment. Additionally, the flexibility to use the units for housing existing commercial tenants during repairs added strategic value and aligned with my broader portfolio goals.

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

I found this deal through my real estate network, which identified the property as a great opportunity for conversion into a duplex. Recognizing its potential to generate strong rental income and align with my broader investment strategy, I negotiated directly with the seller. By emphasizing my ability to close quickly and outlining my plans to enhance the property’s value, I was able to secure the deal at favorable terms.

How did you finance this deal?

I financed this deal through a private lender, which provided the flexibility and speed needed to acquire the property and begin renovations. This financing approach allowed me to focus on converting the structure into a duplex and preparing it for rental while maintaining cash flow for other ongoing projects in my portfolio.

How did you add value to the deal?

I added value to the deal by converting the existing structure into a fully renovated duplex, creating two modern rental units: a one-bedroom, one-bath unit, and a two-bedroom, one-bath unit. This increased the property’s rental income potential and market value. Additionally, by incorporating flexibility into its use—potentially housing commercial tenants during repairs at another property—I enhanced the strategic utility of the investment within my broader portfolio.

What was the outcome?

The outcome has been highly positive. The duplex conversion is complete, with two fully renovated units ready for rental. While the property is not currently rented, it provides flexibility within my portfolio, as it may be used to house tenants from another commercial property undergoing repairs. This investment has significantly increased the property's value and income potential, aligning with my long-term strategy for maximizing returns and optimizing resources.

Lessons learned? Challenges?

Navigating zoning regulations is critical when converting a property, especially when transitioning from a commercial space to residential use. Early research and collaboration with local authorities are essential to streamline the process. Flexibility in investment planning, like accommodating temporary tenant housing, adds value to the portfolio. The primary challenge was ensuring the property met all zoning requirements for residential use after being a commercial space.