Current Triplex Deal

[Gavin Welch]

Investment Info:

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

Purchase price: $77,000
Cash invested: $300

A nice little triplex with two 1/1 and one 2/1 in a small town about 20 minutes away. The property came with one good tenant, one bad tenant and one vacant unit. This property was badly managed by the previous owners property management company. After review of the numbers I knew this property could be a nice income-producing property with some effort. Just to make this deal better I found a great way to finance it because all my investment capital ($$$) is tied up in a renovation project.

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

The numbers on this property are really good. With a $77,000 purchase the monthly $1650 cash flow is great.

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

I was sent this deal from a wholesaler I know. At first, I shopped this property to some investor clients of mine, but the more I looked into it, the more I fell in love with this deal.

How did you finance this deal?

I called my brother and asked if he had any free (not being used) cash laying around. He said he had a line of credit I could use for as long as I needed. (thanks Bro)

How did you add value to the deal?

I raised the rents and evicted a marginal tenant. Overall the property is a lot more stable now.

What was the outcome?

Not sure what I am going to do. I could use the cash from a sale right now, but I love long-term holds.

Lessons learned? Challenges?

Make the sellers get rid of their problem tenants before you purchase. This property was not properly managed and the tenants had gotten away with playing games for far too long and were not willing to abide by my rules.

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

I am a real estate broker and property manager.