Multi Family Fix & Flip

[Derek DeVerna]

Investment Info:

Small multi-family (2-4 units) fix & flip investment in Cincinnati.

Purchase price: $54,000

Sale price: $275,000

Large scale residential redevelopment project in the Madisionville neighborhood of Cincinnati, Ohio. This is the first major renovation project that I have done (rehab costs well over $100K). My plan was to rent both units out at a premium upon completion and then refinance the building to harvest my initial capital investment back. However, I decided to move out of Cincinnati and become a full time real estate investor. The sale of this property

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

As a licensed agent/wholesaler I saw the value of properties in this neighborhood continuing to increase. This allowed me to spot this opportunity as soon as it was presented to me (off market).

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

I found this deal through a wholesaler that I have completed many transactions with in representing other buyers. This was the first time that I decided to personally purchase a deal provided by this gentleman.

How did you finance this deal?

I financed this deal through a hard money lender.

How did you add value to the deal?

I gutted and rehabbed the entire property from top to bottom. Opening up the entire floor-plan, adding a new roof, porch, deck, kitchen, appliances, and much more.

What was the outcome?

I ended up netting just over $39k on this deal.

Lessons learned? Challenges?

Holding costs ended up being much higher than I anticipated. The hard money costs, property taxes, electric/gas, and water bills really add up and need to be taken into consideration when evaluating any potential flip deal.