Fix / Flip or buy / hold, triplex, just outside Boston MA

[Seth Williams]

Investment Info:

Small multi-family (2-4 units) fix & flip investment in Winthrop.

Purchase price: $520,000
Cash invested: $110,000

About to go to market with this 3-family flip. Will be asking 779k. Since we own our own brokerage, we will be able to save some extra cash, and additionally, 2 of the units were still occupied when we closed. This allowed us to renovate the largest of the units a 3 bed 1.5 bath, while the other two 1 bed units stayed occupied, paying the carrying costs.

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

You cannot buy 3 families on market in Winthrop for less than 700k right now, so this was a good buy, whether to buy and hold, or fix and flip. I liked the fact that there were multiple exit strategies on this property, and since we bought it through conventional financing, we were able to keep the soft costs low, while the tenants paid for it!

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

A client of ours in the office found it from their families junk out company, cleaning the place out for sale and we put them under agreement. They thought it needed too much work, and backed out of the deal. Our agents always keep us in the loop on these so I watched it closely, and before it hit the open market I decided to offer what the previous client had it under agreement for, but dropped in a 2.5% commission.

How did you finance this deal?

Conventional financing, through my preferred lender, 20% down, 3/3 arm at a 3.75 rate...what a deal!

How did you add value to the deal?

Renovated / renovating the units slowly, we spent 2 months doing the largest unit, all new electrical on the whole building, added storage units in the common area, as well as coin op laundry, and then when we had one of the other tenants recently leave, we started work on their unit. Should be done in the next month!

What was the outcome?

Hitting the market shortly for 779k.

Lessons learned? Challenges?

You ALWAYS will go over budget, or at least it seems.

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

Anyone over at align credit unit is the best. I can put you in touch if you are in the north shore area.