South Bronx Multi-Family

[Elvis T Santana]

Investment Info:

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

Purchase price: $550,000
Cash invested: $70,000
Sale price: $835,000

House hacked a 3-Family house in the South Bronx. Lived off the income when I transitioned to Massachusetts.

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

Rent appreciation. I considered the Bronx to be the last frontier in NYC. The South Bronx in particular had the cheapest rent of all the areas immediately outside Manhattan AND was highly commutable. As rents increased everywhere else it only made sense that New Yorkers would consider it. Lots of development and revitalization going on at the time and a very attractive cap rate (9%+).

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

Craigslist, paid asking price.

How did you finance this deal?

FHA loan

How did you add value to the deal?

Renovations to attract market rent. New kitchens and baths.

What was the outcome?

Rented at slightly below market rate, lived in one unit and rented the others. Lived free for a year. Moved out and rented my unit. Property cashflowed very nicely for 4 more years.

Lessons learned? Challenges?

Don't rent to family.

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

Very satisfied with my loan officer, my insurance broker and the real estate broker that helped me sell it.