Value- Add Manayunk Tri-plex

[Greg Bishop]

Investment Info:

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

Purchase price: $350,000
Cash invested: $61,000

Value-add triplex in the Manayunk area of Philadelphia. Increased purchase to use commissions towards purchase price.
Upgraded units and increased rent rolls 33%. Achieved a 15% Cash-on-cash return in very rent stable area of Philadelphia.

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

Looking to get into multi-family deals

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

Found on MLS. One of our clients passed on the deal. We thought it was strong enough to not pass up.

How did you finance this deal?

Used a HELOC and commissions to fund the down-payment. Used bank financing for the rest of the purchase price. 30 year fixed.

How did you add value to the deal?

Most units were in pretty good shape. Installed new cabinets, floors, and paint in one unit. Updated kitchen, repaired walls, and paint in another.

What was the outcome?

Able to turnover tenants and increase rents by approximately $1000/mo. in total.

Lessons learned? Challenges?

How to deal with multiple tenants at once. Learned how to time construction more precisely. There are more potential problems to look out for all at once. Multiple mechanical failures (hot water heaters, boilers, ect)