Investment Info:

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

Purchase price: $706,500
Cash invested: $35,250

This is a single family house and a duplex on the same lot, purchased as a "triplex". There is a historical lot line between the two buildings that can be divided using a lot confirmation. I will renovate the single family home, divide the lot, and sell the single family in a couple years. I will keep the duplex in my portfolio. Project should have a net profit of $250,000 after the sale.

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

Originally I was simply looking for another owner occupied, low downpayment, small multi-family project. Based on rents, the property paid for itself with minimal cash flow. However, the ability to do a cost segregation and my 2.5% broker earnings offsetting my 5% down payment, made it a 1,000% return in the first year. Furthermore, during due diligence, I also discovered the historical lot line and the true upside of the deal. This turned a "good deal" into a "home run".

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

I found it on the RMLS. Based on my qualifications at the time, it was one of 3 properties I could buy that had sufficient rent and a low enough price.

How did you finance this deal?

I used a low down payment portfolio loan with a community credit union that required owner occupancy.

How did you add value to the deal?

I will do $50,000 of renovations on the single family and confirm the lot for $5,000. The renovations will include adding a bathroom to the master suite upstairs and simply adding french doors to an existing room to make a 3rd bedroom. I will also update the kitchen and bathroom in current existence. Then I will resell the single family for $550,000-$600,000 in Spring of 2022. Since I am living here for 2 years, I will pay no capital gains on the $250,000 projected net profit.