6 Bedroom 5 Bath Multi Generation Co-living New Construction Investment Project

[Ke Nan Wang]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $120,000
Cash invested: $370,000

Completed a co-living new construction project in St. Augustine, FL, managing it independently (not Padsplit). Acquired a double lot for $112k after resolving title issues and paid $360k for construction, creating a 6-bed, 5-bath house designed for co-living or multi-gen use. Fully occupied, the property grosses $5,570/month with $4690 net profit after expenses. Total investment: $420k, with a 1031 exchange offsetting $300k. 

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

I was drawn to this investment mainly to test out the new padsplit model. Plus for its high cash flow potential, utilizing a 1031 exchange to reinvest gains effectively made this experiment a relatively low risk for me.

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

It was listed on Zillow for $110k and we made a low ball offer at $90k, ended up getting under contract for $95k. However, a surprise occurred with title that drove up our acquisition cost to almost $120k. Since we were in it for the 1031 exchange and it was still a deal, we still followed through and close the deal.

How did you finance this deal?

1031 exchange from a sale of a rental property plus HELOC to fund the remaining.

How did you add value to the deal?

Strategic Purchase: Acquired a discounted double lot below market value with a $17k impact fee credit.
Custom Design: Built a 6-bed, 5-bath home tailored for co-living or multi-gen use, maximizing tenant appeal.
Efficient Management: Managed construction, and self-managed operations to minimize costs.
Premium Marketing: Furnished the property and used multiple platforms to attract quality tenants quickly, achieving full occupancy.

What was the outcome?

Full Occupancy: The property achieved full occupancy within three weeks of listing, with strong tenant demand.
High Cash Flow: The property generates $5,570/month in gross revenue and approximately $4,690/month in net profit after operating costs.
Effective Use of 1031 Exchange: $300k of the total $420k investment was offset by the 1031 exchange, minimizing out-of-pocket expenses.
Long-Term Stability: Designed for durability and versatility, the property is expected to cash flow for decades

Lessons learned? Challenges?

How to execute a 1031 exchange build to suit
How to operate and self manage a co-living property

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

Nope. I'm the real estate agent for the purchase, the contractor for the build and now the property manager for the property.