Our Two for One Deal!

[Stephanie Southerland]

Investment Info:

Single-family residence buy & hold investment in Safford.

Purchase price: $72,500

1200 SF Craftsman bungalow, built in 1930, with an over the garage (450 SF) apartment behind it, on large lot, close to downtown, in a desirable, older neighborhood. This will rent for 1200 for the house, and 650 for the apartment.
Plus, we are renovating the garage under the apartment into two storage units for the tenants. They are already separated, so now, we are just going to add the doors and some new insulation and drywall. The house needs about 20,000 in work, and the apartment is rent ready besides a new water heater and baseboard heaters. The ARV on this property is around 185K.

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

The added bonus of an apartment. 2 units for the price of one!

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

The seller called me wanting to short sale it. He lived out of state, bought it in 2006 for 125K, and even then, it needed a rehab. He never did anything with it, except a new roof a couple years ago, due to a torrential hail storm in the area. Had someone managing that was not licensed and had NO business property managing. When he told me there was an apartment, and I worked the numbers, I made an offer. We were able to pay his loan, AND put a bit of cash in his pocket.

How did you finance this deal?

Hard money, and some of the cash we took out of a previous investment. The hard money is at 15%, interest only. This will be refinanced in 6 months with a lender I am currently working with.

How did you add value to the deal?

We will be renovating the house, and even then, the deal is a cash cow.

What was the outcome?

Apartment is nearing completion, and the house should be ready in about a month, possibly less.

Lessons learned? Challenges?

Will keep you posted on that, as we aren't neck deep into it yet.

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

We are Real Estate Agents