How I increased the value of my rental by $255k in 6 months

[Carol W.]

Hi fellow members,

I closed on a 4-plex six months ago, with three units occupied and one unit vacant.  Rented out the vacant unit at market price ($2700) on the weekend after closing.  I also submitted application for rent increases on all three occupied units to the maximum rent schedules, which gave me a total increase of $865/month.  Upgrades to property: new windows, exterior paint, new laundry room, hot water boilers, landscaping, total cost: $50k.  Offered cash to  all three existing tenants to move out, and one of them accepted and moved out on the 4th month.  I spent one month and another $50k fixing up the apartment, and increased the rent from $1743 to $2800.  Total rent increase since purchase: $4622/month.  Immediately after I made my 6th mortgage payment, I applied for a cash-out refi with the same mortgage broker that got me the purchase loan, and am closing on the refi with a 0.125% higher interest with a $170k cash out this week.

The original purchase price was $920k, with $300 down.

Total cash invested=$300+$100=$400k, 

COC before refi: $35,280/$400,000=8.82%

Current appraised value=$1.175m, new loan=$800k, cash out amount=$170k

Total equity gain=$75k, 

COC after refi: $24,080/$230,000=10.47%

I am a rookie investor, and would love to hear any comments/questions on my deal and/ the calculations.  

Thanks for reading!

[Michaela G.]

Originally posted by @Chris Mason:

Next time someone says "Bay Area real estate is too expensive, and unfriendly to landlords because their a bunch of evil lefties, and it's impossible to make anything cash-flow positive, and the cap rates suck, and bla bla bla," I will refer them to this thread and your outstanding success in....

(drum roll for those that can't pull property profiles)

...The People's Socialist California Republic of BERKELEY!

Well done at proving that there are deals to had in any market, at any time, if you just look hard enough and take appropriate calculated risks @Carol W..

 It's not so hard finding deals, if you have 400K cash on hand.