Everyday Challenges = New Milestone Towards Multi-Unit Rentals

[Debra A.]

Investment Info:

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

Purchase price: $850,000
Cash invested: $300,000

Private purchase of a 1bd 1 bath main house-remodeling into 2/2 in progress
Lower lever-1 bedroom apt-remodeled kitchen and bath basically upgraded everything
2000 sq ft barn- will become 2bd. 2 bath
1800 sq ft garage-cleaned, lit, restored garage opener and 2 car parking--future potential for an upper unit
35 dump runs since June 1 and counting. Former owners junk 1st 20 dump runs-and construction
New septic to be installed in spring
New utility pole to be installed by utility company.

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

We have been searching for the right multi-unit property for quite awhile but had not found a good fit.

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

A friend called and said that she has a friend ready to downsize and sell. We did a private sale and shared the same agent. Not an easy sale process as it turned out. We offered to purchase as is-no more upgrades. The seller took as is as we had to move buy her junk in order to buy the property. The first 20 dump runs were all about clearing the property!
She rented for 4 months which turned out to be good cash flow.

How did you finance this deal?

Savings and we sold stock

How did you add value to the deal?

As a visual artist & designer, my expertise is envisioning potential in properties and using my business background to analyze the upgrade costs with the areas income potential-then, my team and I work our magic.

What was the outcome?

We are 7 months into the multi remodels. The friend who referred us to buy the property came by this week and was astounded in the transformation thus far.

Lessons learned? Challenges?

Trashy properties are like hidden gems awaiting to be uncovered. Take risks on these value properties and reap the future rewards. We are in the $$$$ pit time of the upper level home remodel where $$ just flows out in order to fix old problems but the upside is now beginning to show and we'll soon begin the final building and septic prior to renting the 3 units.

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

BG Bates in west Marin County is with Sotheby's Real Estate