Value-Add Opportunity: Renovating an 8-Unit Apartment Building in Drexel, NC

[Mitchell Coles]

Investment Info:

Large multi-family (5+ units) buy & hold investment.

A two-story, eight-unit apartment building with four units on each floor, each offering two bedrooms and one bath. While the property requires renovations, inspections and estimates have been completed, and construction is now underway. Once updated, the building will provide modernized living spaces and support a significant rent increase, enhancing cash flow and property value. This investment aligns with a broader strategy to maximize returns in the growing Drexel market.

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

I was drawn to this deal because of its potential as a value-add multi-family property in a growing market. The eight-unit building, with each unit offering two bedrooms and one bath, presents a prime opportunity to increase rental income through renovations. Its size and layout make it ideal for long-term cash flow, and the demand for updated housing in Drexel ensures strong tenant interest once improvements are completed.

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

I found this deal through my real estate network, which highlighted it as a strong value-add opportunity in Drexel. Recognizing the potential for increased cash flow after renovations, I conducted thorough due diligence and negotiated directly with the seller. By demonstrating my commitment to revitalizing the property and emphasizing my ability to close quickly, I secured favorable terms that aligned with my investment goals.

How did you finance this deal?

I financed this deal through a private lender, allowing for a swift acquisition and the flexibility to allocate funds toward renovations. This financing approach ensured I could move forward with construction plans immediately after inspections and estimates were completed, aligning with my strategy to maximize the property’s rental income and value.

How did you add value to the deal?

I added value to the deal by initiating cosmetic repairs to make the units rent-ready while preparing for more extensive renovations. These updates include modernizing the interiors and improving the overall appeal of the building to attract tenants. The planned renovations aim to enhance the property’s condition, allowing for significant rent increases and maximizing the long-term income potential of this eight-unit apartment building.

What was the outcome?

The outcome has been successful so far. Cosmetic repairs have been completed, and the building is now fully rented, generating steady cash flow. Plans for more extensive renovations are still underway to further modernize the units and increase rental income. This property is already contributing to my portfolio’s performance and has strong potential for even greater returns after the planned upgrades are completed.

Lessons learned? Challenges?

Investing in multi-family properties requires balancing immediate repairs for cash flow with long-term renovation plans to maximize value. Thorough inspections and budgeting upfront are critical to avoiding surprises during renovations. Keeping tenants informed and satisfied during the process ensures smooth occupancy transitions. Additionally, ensuring the renovations met both current rental standards and future plans required careful planning and oversight.