Hilton Ave - 12 Unit MF

[Art Mimnaugh]

Investment Info:

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

Purchase price: $410,000
Cash invested: $20,000

We bought this with 25% vacancy and an average rent of $500. We done some rehab updating units, implemented utility bill back and new management. With this in place we have raised rents between $700-$750.

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

As OOO investor was looking for our first deal to be over 10 units to have impact with property manager. Also building was in a good school district bout rougher area.

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

Deal came to us through a broker.

How did you finance this deal?

As was parceled as three separate APN’s we acquired with standard residential financing and three loans. After rehab and new leases we refi into a standard commercial product removing all our cash plus more.

How did you add value to the deal?

Rehabbed the out of service units, cleaned out non paying tenets, utility bill back, and general building/parking lot fixes.

What was the outcome?

After rehab we buildings apprised at $660 and we were able to pull cash out while still generating about $2k a month in cash flow.

Lessons learned? Challenges?

Don’t hang on to wrong team for too long. Had to go through a few PM’s to make it work. Class C isn’t passive if you want income no matter how good the PM.