6 Unit multi family buy & hold in Salem Ma

[Eric Sullivan]

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $1,250,000
Cash invested: $115,000

Harbor st was a great opportunity because of the value add that we saw. Rents were 30-40% below what they should be and while we could just raise the rents as is, with cosmetic updates it allowed us to gain even further value and maximize profits. The property also has been owned by a previous investment group who had updated all heating systems just a few weeks before listing it. The bones and mechanicals of the property were all in great condition. This made sure we did not have any major capital projects right from the start. The property consists of 6 units in total, with 10 parking spots.

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

Outside of our condo conversion projects, we are actively looking for value add multi-family properties. The numbers were strong with a COC just shy of 25%.

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

Our agent notified us. We ran our numbers and lead with our offer of 1.25m. They countered 3 times but we didn't budge and were able to close.

How did you finance this deal?

20% down with a local bank and a small construction loan for 115k @ 4.1% i/o, 12-month term.

How did you add value to the deal?

Ability to raise rents 30-40% per unit. As well as cosmetic updates.