Duplex in Lexington, Kentucky

[Emily Beatty]

Investment Info:

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

Purchase price: $180,000
Cash invested: $45,000

6 br / 4 bath duplex (3/2 on each side) purchased with Section 8 renters in place. Long term tenants whose rent is paid by Section 8.

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

tenants are in place already. The home was build relatively recently (1990) so it is all electric and doesn't have a ton to do.

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

It was a 2nd sale by a property owner who had just sold a duplex we had an offer on but lost the deal - outbid by another buyer. When we asked if they had other deals to sell they said they'll be selling the duplex across the street soon so we offered them a bit higher than we had offered on the previous duplex and they took the offer straight away.

How did you finance this deal?

Hard money lending with a private bank. 25% down through LLC

How did you add value to the deal?

Fast closing, cash down payment of 25% ready to go, lending ready to go. Easy closing terms - asked for home warranty provided by seller on this one but that was the only condition.

What was the outcome?

We have owned this property for a year and a half and been able to raise rent 2x.

Lessons learned? Challenges?

Rent always comes on time. Utilities paid by tenants. Inspections are every 2 yrs by section 8. We have been able to raise rent 3-5% each year through section 8 approvals but it is a process we have to keep up with like clockwork! Easy to put mortgage payments on auto pay since the rent is also paid by direct deposit from S8 as well. Downside - maintenance must be kept up with pretty meticulously. Not a lot of room to defer maintenance items.