Vancouver, WA Duplex gut renovation

[Erik Bood]

Investment Info:

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

Purchase price: $292,000
Cash invested: $104,000

Purchased and completely renovated duplex. Renovation included new kitchen, bathrooms, windows, doors, trim, flooring, gutters, siding, etc. Literally replaced almost every surface in both units. After interior was renovated updated exterior with new landscaping and fencing.

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

I buy and hold small multi-family properties for the long term.

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

I found it on the MLS in December of 2018. I got it under contract at an attractive price due to the poor condition of the property. The rents were low at around $850-900 a side and the property had significant deferred maintenance. After inspections I was able to get an additional $17k off of the purchase price due to previously unknown issues.

How did you finance this deal?

I used traditional bank financing but was able to get them to allow me to put 20% down instead of the traditional 25%.

How did you add value to the deal?

Completely renovated the property and raised the rents from $850-900 per side to $1400 per side.

What was the outcome?

The property cash flows great and it's value is in excess of $425k. I plan to hold it long term unless a good 1031 opportunity presents itself.

Lessons learned? Challenges?

I own this property with a partner and it was my first partnership deal. The partnership has worked out extremely well overall but we both learned that we did too much of the work ourselves instead of hiring a reasonably priced contractor. We should have hired a contractor for more of the work, especially the work that wasn't overly expensive. We had a contractor help us with some repairs but far less than we should have. In the future I will do far less renovation work.