Duplex + Land in Charleston SC

[Andrew Merritt]

Investment Info:

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

Purchase price: $215,000
Cash invested: $55,000

Duplex + 3 additional lots zoned R-2 high density. The duplex cash flows the entire purchase price of all lots. Long term plan is to add small apartment complexes to the vacant lots, possibly up to 16 units.

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

I'm working on building up my portfolio of small multi-family units.

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

Found it on the MLS. The seller initially listed the duplex + 3 lots for $250k. After about a month he dropped it down to $225k and also listed the duplex on its own at $150k. I initially went just for the duplex but the land was a steal at that price with lots of potential. We asked the seller's agent what the seller would realistically accept and he said low $200s, so we offered $200k for everything. He countered at $215k and we had a deal.

How did you finance this deal?

Down payment will come from my HELOC on my primary residence. I currently have a SFR house under contract and will use the proceeds from that to repay the HELOC. I'll be using traditional financing w/ one loan for the duplex and 2 loans for the other 3 lots (2 are next to each other, one is across the street).

How did you add value to the deal?

Nothing yet, but I will be adding apartments to the vacant lots in the future.

What was the outcome?

So far so good.

Lessons learned? Challenges?

I've never built a house before so it will be challenging to work w/ a builder to build the apartments when it comes time for that.

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

I work with Rick Willis and I highly recommend him.