3 Family off market purchase in Salem Ma

[Eric Sullivan]

Investment Info:

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

Purchase price: $600,000
Cash invested: $150,000

Purchased a 3 family off-market that I plan to use as a short term rental. I have gutted about 75% of the house and am redoing all of the plumbing, electrical, HVAC, and roof.

Unit 1 was a full

Unit 2, full gut except for the living and dining room I moved the kitchen and am adding a second full bathroom and created a master suite.

Unit 3, new kitchen and doubled the size of the bathroom.

**Renovations are currently in process

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

Most of my investments are in the area, and currently I live in a condo on the same street. Per the short term rental laws in Salem if you live in the building you can airbnb the other units. So I plan to live in unit 1 and airbnb the other 2. I operate another airbnb a few streets over so I have real data to go off of for numbers. I expect to have all of my living expenses covered and then cash flow about 85k-100k on top.

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

Brought to me by an agent who works exclusively in the area.

How did you finance this deal?

20% down from a bank I have worked with several times. I am funding renovations myself, no construction loan.

How did you add value to the deal?

Gutting a majority of the house and the finishes will be in line with luxury condos in the area.

What was the outcome?

Still in process.

Lessons learned? Challenges?

People used to pour 4" of concrete in the bathrooms to tile which required us to jack hammer the floors. The weight along with notches in the joists required me to redo every bathroom floor from joists to subfloor.