Historic Multi-family AirBnB

[Dave Alford]

Investment Info:

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

Purchase price: $185,000

Contributors:
Corey Griffo

This property is a 1920 dwelling that was converted to a triplex in the 70's or 80's. It is located on one of the main streets of Lexington KY walking distance to the University of Kentucky and the Arboretum. There is also an ADU above the detached garage. Currently being used as a short-term rental (AirBnB).

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

Our company was looking for a small multi family fixer upper and this met all the criteria and it was in an A+ location.

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

It was listed on the MLS for nearly 6 months. It was in dire need of work and had current residents that I would classify as hoarders. It was originally listed at $245K and had dropped to $215K at the time of our offer. We were able to get in under contract at $185K.

How did you finance this deal?

Conventional 20% down loan.

How did you add value to the deal?

We completely gutted the home and replaced all electrical, plumbing, walls, kitchen, bathrooms, re designed layout, etc. Total rehab costs were around $115,000.

What was the outcome?

BRRRR'd this property. The appraisal came in at $475K. Overall profit was about $175K.

Lessons learned? Challenges?

We originally tried to do one unit at a time and AirBnB the other unit, that was a mistake. from loud construction in the mornings, to a ceiling caving in on a guest from a plumbing leak, it was not a good idea and costs us more time and money.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

We (Griffords,LLC) are also a realtor team (The Grifford Team) with RE/MAX Elite in Lexington, KY.