Buy & Hold Duplex In Eastern Pennsylvania

[Nate Brown]

Investment Info:

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

Purchase price: $84,000
Cash invested: $150,000

The property is a detached duplex with separate entrances for each unit. Both units are occupied The combined rent roll is $1,500 per mo. I paid $84K cash for the property and will use cash for the construction costs, so I have no capital costs. The property and both units has significant physical distress. So, the property needs significant repairs and updating. I anticipate $45K-55K in reno costs with a 6-12 month timeline to be completed in three Phases. 1) Exterior 2) Unit 1 3) Unit 2.

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

The price per-door and the value add opportunity

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

I found this on the MLS and I made what I felt was a fair offer based on the current cash flow and physical condition of the property.

How did you finance this deal?

Cash from myself and my partner.

How did you add value to the deal?

By being able to offer cash, close quickly and absorb the significant cost of repairs because I do not have to pay for capital.

What was the outcome?

The offer was accepted in less than 48 hours.

Lessons learned? Challenges?

Lesson Learned: The city's Building & Code Department can be an ally and an asset
Challenges: Showing the very talented members of my team how technology can be leveraged to improve and enhance efficiency

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

I worked with a great team, but this is my first deal. It would be irresponsible of me to make a recommendation at this time. If all goes well on the next 2 or 3, I'll be screaming their praises.