1 Cold Call Turned into 2 - 4plex deals

[Derik Bjorgo]

Investment Info:

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

Purchase price: $325,000
Cash invested: $136

Bought this from an 87 year old man who was ready to "retire". Rents haven't been raised in years and are currently rented out for $830 per unit. They are all 2bd, 1ba 850sqft. I expect to get $1,150 once renovated to raise the cash flow up to just under 2k/mo. I have comps at $400k for exact 4-plex's in the area...should be able to pull out some cash to get into another one here soon.

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

It was a 2 for 1 opportunity. I called on a 4 plex my g/f wanted and he said you have to buy both. So that's what we did.

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

Cold called it using a online reverse look up. Pulled lower end comps as these building needed work to justify our starting price. They also gave away their number early on while looking at the building. We also bought "as-is" no inspection/hassle.

How did you finance this deal?

One FHA and mine was VA.

How did you add value to the deal?

Taking these off his hands with no hassle and getting him what he wanted which was to retire. Really an ideal situation and being in the right place at the right time.

What was the outcome?

Units acquired and currently renegotiating leases and moving tenants around in order to fix the units.

Lessons learned? Challenges?

Getting a unit in each vacant as required by the financing. One of the units had a 40 year tenant who was a hoarder. He was the one to go and it actually was much easier than initially expected as negotiations with him and his son were handled in a win-win way to make ends meet.