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Updated almost 6 years ago,
Single house duplex conversion
Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $45,000
Cash invested: $35,000
Owner financed five thousand down, 10 year, 7 year call, 6%, large three story house. Converted upper two stories into a duplex with plans to eventually convert the bottom story into a unit making it a triplex.
What made you interested in investing in this type of deal?
This deal was interesting to me because I had the skill necessary to do all the upgrades as well as the employees already on staff to help with the conversion. (contractor at the time) The location beside a large hotel complex and kitty corner to two churches, one block from a park, three from the school, and two from the grocery store. (small town) Really couldn't say no. Had basically no liquid money at the time due to other projects
How did you find this deal and how did you negotiate it?
This deal was brought up by a realtor who I did a lot of rental repairs for.
How did you finance this deal?
Owner finance, repairs and down were cashflow out of personal earnings. Note at the time the owner was asking for Cash Only Offers. Took the gamble and offered what worked for me.
How did you add value to the deal?
Complete conversion from single family to multifamily.
Re-wired with four separate meters. I only pay for the electricity to run the water well and the electricity to the boilers.
Re-plumbed
Fixed a bunch of nasty cosmetic issues
Added decks
Cleaned the yard and removed brush
What was the outcome?
Paid this one off shortly after the conversion. It cashflows month after month with very little vacancy. Still own it, due to my regional location it is worth roughly 200,000 which isn't bad considering my out of pocket expense was perhaps 40,000