Small Town Duplex; Big Time Cash Flow

[Matt Smith]

Investment Info:

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

Very affordable Duplex has been solid cash flow income for 7 yrs and counting.

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

After a recent sell, this was the only property I could afford to get into all cash. This was before I knew anything about creative financing.

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

This was a friend of the family deal that worked out for everyone. Since it needed repairs, the seller was happy to discount with an all cash offer.

How did you finance this deal?

This was an all cash deal.

How did you add value to the deal?

Immediately after purchase, rehab/repairs performed to convert this property into a 2-story duplex. Separating the units, adding plumbing, electric, bathroom, and kitchen would double the income potential of this good deal.

What was the outcome?

After repairs/rehab, this property has steadily leased for great ROI.

Lessons learned? Challenges?

The contractor cut some corners with the bottom unit that cost more to correct in the long run. The challenge was keeping an eye on progress as work was being performed. I was in Houston working full time, and property was 3.5 hrs away. This experience provided a fast learning curve. I now set deadlines with payment penalties, and I know more about the remodel process so as to not be taken too easily moving forward.

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

No agents were involved in this deal.