Multifamily reposition creating 19% COC

[Gaston Prevette]

Investment Info:

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

Purchase price: $110,000
Cash invested: $30,000

4 unit c class apt- under market rents
Crime report was clean
Bus stop in local proximity
Local shopping and other necessities close as well
Professionally managed

Property Details:

1/1- 500sq feet each
No AC or window units currently in any units
One vacant
Base board heat
Sepertely metered
Tenant pay water/ electric
Replacement windows
Current tenants keep their units nice, they have just been underserved by the previous owners and their units needs some repair
Professionally managed with current leases and deposits in place
With it being a quad all tenants have a trash can ( no expense for a dumpster)

REPAIRS NEEDED:

2 subfloor repairs needed in 2 units, flat roof needs minimal repair, 3 waters heaters need replaced, about $1,000 allocated for any plumbing repair, bracing underneath as needed or where any joist are weak. Plan on pressure washing entire building, fixing any loose/missing vinyl, paint window trim as needed , paint foundation slate grey, repair handrails ( paint white) , paint all 4 doors black, and add modest landscaping to improve the outside appearance of the property

TOTAL spend budgeted $10,000 for Repairs/ Upfits

DEAL DETAILS:

Purchased through a broker
Original asking price was $130,000 we were able to get it under contract for a $110,000 cash offer because another person who was trying to buy it kept it under contract for 3 months and the owner was ready to close fast.

Currently 3 of the 4 units are rented for $1225/ month so out of the gate it meets the 1.1% rule. We will end up putting almost $10K in for rehab throughout occupied units as tenants move out and are almost done rehabbing the vacant unit which we plan on renting for $500
.

Our strategy for this property is to utilize 30 year money for the fixed rate, and create a large cash flow stream that will help us purchase larger Multifamily properties for our portfolio moving forward.

Monthly cash flow once completely repositioned
$2000- $1243 in expense ( PITI, Mgt, $75/ door for reserves, lawn, etc)
Monthly cash flow $456/ month
19.5% COC
Will have all our money back in 5 years