First multi-family investment property - Duplex in Georgia

[Carrie Hays]

Investment Info:

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

Purchase price: $42,000
Cash invested: $30,000

Cinder block 2/1 duplex. One unit was rented for below market rent and other unit was vacant. Renovated vacant unit, raised rent by 60% to $600, existing tenant was able to qualify for higher rent and wanted to move to new unit. We chose to rent to existing tenant for slightly below market because she has been there for 14 years and takes very good care of her unit.

Currently working to renovate other side and will then place in rental program at $675-700 per month.

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

Cash flow potential was extremely high. We are expecting an 18% CAP rate.

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

Found on MLS and watched until price was reduced to $45,000. Offered $42,000 cash and seller accepted.

How did you finance this deal?

Cash purchase through a self-funded 401k loan. We will be financing once the rehab is complete and both units are rented.

How did you add value to the deal?

Full rehab, including installing central HVAC in both units. Added significant amount of curb appeal by painting exterior and cleaning up the yard.

What was the outcome?

First unit was rehabbed and rented immediately. Second unit will undergo a 3 week rehab beginning the last week of May.

Lessons learned? Challenges?

Custom window sizes are expensive and take about 3-4 weeks for delivery. We did not estimate this delay when purchasing and should have ordered the windows on the day of closing.