14 Unit duplexes- New Construction

[Scott Jenkins]

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $960,114
Cash invested: $130,114

7 single story new construction duplexes (14 units). 1 Bedroom 1 Bath units. High end finishes, crown, wood floors, custom cabinetry, custom showers, granite counters. Thibodaux market has a shortage of 1 bedrooms, especially in the higher quality market. These 1 bedrooms rent for the same price the average 2 bedroom goes for in Thibodaux. $1,250,000 appraised value. Year 1 Cash on Cash Return 21.9% with a 232.5% IRR. $750 per month per unit. Property named THE PORCHES. Rent to primarily young professionals in a college/medical town.

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

Purchased premium property location at land premium.

How did you finance this deal?

Traditional bank 20 year loan with 20% down on phase 1. Borrowed against equity to complete remaining units.

How did you add value to the deal?

Self contracted new construction. Sub'd all work.

What was the outcome?

Amazing cash flow

Lessons learned? Challenges?

Higher finishes don't add tremendous building costs when done reasonably, and increase the interest in and quality of the property dramatically.