Kansas City Fourplex

[Kyle Wells]

Investment Info:

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

Purchase price: $365,000
Cash invested: $111,250

This side-by-side four plex has two 3-bed/2.5 bath and two 2-bed/2 bath units. Each unit has a single car garage.

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

The ability to purchase a multi-family with well below market rents at a discount that had one problem unit that required an investment of about a $12k. Property was renting for $3,135 pre-sale and is now renting for $4,190 with built in rental increases bringing gross rents to $4,390 by August 2019.

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

My realtor and I had been looking at properties for a couple of months with no luck finding a property in a good location for the right price. Then this deal came along.

How did you finance this deal?

30-year fixed conventional loan with 25% down.

How did you add value to the deal?

Remodeling two units. New floors/carpet, new paint, new kitchen appliances, new countertops, new bathroom vanity.

What was the outcome?

Still in the process. So far the two renovated 3-bed/2.5 bath units went from renting at $750 and $795 respectively to $1,300 each. The renovations totaled about $20k, meaning we'll break even by month 19. Estimated forced appreciation about $50k.

Lessons learned? Challenges?

Plan rehabs as soon as inspection is completed. Our PM did not properly motivate or stay on top of contractors as needed and two of the units were vacant for 2-3 months (one contractor was fired). Granted, we were able to significantly raise rents once completed.

[Jake Riordan]

Congrats Kyle!!  Nice job on the rents, that's obviously fantastic.  Where roughly in the city is it?  Best of luck.