Blue Bridge Properties 2nd investment

[Dave Hutson]

Investment Info:

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

Purchase price: $135,000
Cash invested: $3,300

2 Unit home needed a few updates:
Unit 1 (Main Level and Basement) 2,100 sqft. 3 Bedroom 2 Bath. Bonus Room. Washer and Dryer. 1 Stall Garage detached.
Unit 2 (Upstairs) 770 sqft. 1 Bedroom 1 Bath
We split the water to the upstairs unit (submeter) and pass water/sewer costs to tenants
Originally only one gas meter - converted the upstairs unit to all-electric to avoid the need for a second gas meter.
Needed a new roof (redecking and shingles)
Updated windows, new paint and trim, new garage door.

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

Location. Price was below market value. It needed some updating that most people weren't interested in doing (new roof).

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

Business Partner found the deal on MLS. We negotiated through our Real Estate Agent. Seller was facing foreclosure so we had that to our advantage.

How did you finance this deal?

Conventional Loan (75%) - HELOC (to cover down payment and repairs) - Personal funds

How did you add value to the deal?

Split utilities, new roof, updated windows, remodeled a bedroom, new paint throughout, added trim

What was the outcome?

appraised for 17k more than the purchase price. Able to command a higher monthly rent from both units

Lessons learned? Challenges?

Verify utilities are split prior to purchase - there was only one gas meter.
Add more contingency reserves for rehab budgeting (10% buffer)

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

Yes we have partnered with a specific agent in Grand Rapids, MI area for all our deals - Kristin Moore Keller Williams