SFH + Commercial warehouse = Unique duplex

[David Thompson]

Investment Info:

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

Purchase price: $72,500
Cash invested: $30,000

2 bed 1 bath bungalow in the front and 2000 square foot Shop in the back!

Both rent for $650 water included

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

Perspective tenant and also a need to find a deal! Sometime you just have to make a deal happen!

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

It had been on the MLS for over 3 years. The 2/1 house needed a lot of work and the owner owed money to the IRS. I had someone in town that needed a ware house to rent, He loved it so I negotiated a deal with the seller to allow my tenant to move in before closing.

How did you finance this deal?

Borrowed $72500 at 15% down 5.75% interest from a local commercial banker. They agreed to lend 30k to rehab the project as well.
All in at 102500 - 15k (DP) $87500

How did you add value to the deal?

Comps were hard to find considering there was no other 2/1 with a 2000 sq shop building. So we valued the warehouse and the SFH separately rounding down to be conservative with the numbers

What was the outcome?

Tenant was already placed in the warehouse before closing and the rehab in the 2/1 was about $1000 over budget and about 2 months behind but all in all it was a great rehab!

Lessons learned? Challenges?

Budget for air units no matter what! and always inspect in the crawl space.

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

Anstaff bank
Joseph walker @ Harps