This is a fouplex that was vacant and had an absentee owner. We are doing a full cosmetic renovation and doing most of the work ourselves. We budgeted $77,000. After rehab, our units should rent for $900-1000 per unit. All in we should be at about $150,000. The ARV should be around $300,000. I will update when we complete the rehab, but we are targeting mid-late September.

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

I love the idea of multifamily and passive income. I also wanted something that we could add value to.

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

This is my first deal and I found it from direct mail to absentee owners. It was also going through the foreclosure process. I got it for the payoff amount and it had been vacant for a year I found it through direct mail and the seller just wanted the payoff amount. He was just happy he didn't have to short sale. Someone else looked at it and tried to get him to short sell and then passed on the opportunity when he wouldn't, which is shocking to me.

How did you finance this deal?

Private money - $115,000
Our funds - The remainder
Planning to refinance after six months

How did you add value to the deal?

77k in rehab costs. We are replacing all cabinets, vanities, counter tops, appliances, a water heater, a couple condensers, and adding vinyl siding. We are putting in a ton of sweat equity. Scraping popcorn ceilings, painting, installing new trim (rented a scissor lift for a month), pressure washing the brick, replacing some windows, drywall patches, new shower surrounds, and ripping out carpet to add vinyl plank. Electrical and plumbing was pretty good, just had to fix a couple leaks.

What was the outcome?

TBD but so far we are on schedule and budget after 3 weeks.

Buy and Hold Fourplex

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