4 Unit Brought to Life

[Cheryl Mack]

Investment Info:

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

Purchase price: $12,000
Cash invested: $30,000

This place gave new meaning to the phrase "deferred maintenance"! It had great potential, but needed everything x4 units. Fortunately, electrical, furnaces, and water heaters had been upgraded. We plunged into structural supports and roof upgrade, plumbing upgrade, and roof repair. Later we sealed gutters, repaired masonry stucco, added exterior paint, porch deck, and replaced half the windows. 3 units were totally upgraded inside inc@luding floor refinish, and paint. 4th unit in progress.

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

This was our first multi-family. We liked the potential cash flow and style of the building; we also wanted to be part of an improving neighborhood.

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

An opportunity was brought to me and I negotiated to buy and pay the tax debt.

How did you finance this deal?

It was a cash deal.

How did you add value to the deal?

Management was sorely needed. We provided that. Rents were brought into line with neighborhood comparables and cash flow increased further when negative tenants were evicted.

What was the outcome?

The building grosses about $1500/month with only 3 units occupied. We are still in the upgrade phase, as a full roof job, porch stair/wall repair, and completion of work in 4th unit is planned.

Lessons learned? Challenges?

All our other properties are sfh. This building has more drama than the others, but it is always an interesting place to be. We have good tenant relationships now, thanks to being present here more often than in the sfh's.

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

I worked with Andrew Fidler at LaPlante Real Estate to get the property under contract and begin the upgrade phase.