Second deal, first rehab to rent

[Luke Harrison]

Investment Info:

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

Purchase price: $45,000
Cash invested: $30,000

This is a two unit home my girlfriend and I bought through bank foreclosure.

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

This was our second deal, we were interested in it because it was close to home, was a distressed property, and thought it would be a good addition to our portfolio, while giving us experience with repairs and maintenance of distressed homes.

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

We had seen this property 5 years prior in pre foreclosure, and couldn't make the deal happen due to being novice in the processes. When it showed back up in the market for a cash only purchase, we were excited to redeem our missed opportunitie. This home would have been our first deal if we would have gotten it 5 years prior, so we were excited to see it come back on the market.

How did you finance this deal?

Through a private lender.

How did you add value to the deal?

We completely renovated the interior of the home. We started with the upper unit, once that was done we rented that unit, and used their rent as capital to help finance the lower/larger unit. The entire process took almost a year, but we had rent coming in after the first 6 months.

The reason it took so long? We did everything ourselves, and couldn't be happier. We learned so many valuable lessons that will come in handy for years to come.

What was the outcome?

We still own this property and are using the cashflow to potentially fund future deals.

Lessons learned? Challenges?

Learned many valuable hands on rehab lessons.