Town Houses With Fire Damage

[Ronald Starusnak]

Investment Info:

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

Purchase price: $30,000

Cash invested: $100,000

Contributors:
Molly Walsh

Three town homes in the booming Cicero, NY Market with an ARV of $350,000 if considering a 10% cap. We will be doing a cash out refinance on these at the end which should give us around $1,000 in monthly net. Of course we will be using the cash from the refinance to purchase more buy and holds.

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

Very low purchase price due to the severity of the fire damage but as a general contractor, it is not very expensive for us to repair.

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

Owner asked us to quote a roof and some repairs on the property but decided to walk away and asked if we wanted to purchase it, I paid their asking price as there were a few other offers on the table. We paid $30k and gave the owner a free roof on one of their other properties.

How did you finance this deal?

We used an excellent hard money lender. They're great to work with but our closing costs were higher than if we used cash. We ended up bringing almost $40,000 to closing after consideration of points, prepaid taxes, insurance, 20% down, etc.