illegal to legal 2 unit

[Frankie Renaldi]

Investment Info:

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

Purchase price: $161,000
Cash invested: $14,000

This is two SFR detached buildings on 1 deed. 1 - 4bedroom cape cod and 1 - 2 bedroom apt above a 2 car garage. Buildings sit on a 3/4 acre lot w/ 2 septic systems.

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

This property had been operating as a 2 family illegally since 1968 in plain sight. I knew we could buy low due to that (and no inspections) with an easy approval for 2units. Virtually no updating needed (5k total with painting) and the appeal process for 2 units. 450 dollar app fee & 30 minutes in front of zoning & we got the green light. Main house rents for 1500 & apt w/ garage rents for 1200. 2700 rent roll, PITI 1600 after refi on a 20 year commercial and now the value is 255-260k.

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

Grandfathers home of a long time school friend

How did you finance this deal?

private money for 4 months and cash out refi to 20 year commercial

How did you add value to the deal?

got formal approval for 2 units

What was the outcome?

homerun

Lessons learned? Challenges?

always look for a value add especially when it involves an easy path to a favorable zoning ruling

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

I am an agent. Lender was First Keystone Bank (my branch was in Bethlehem Pa - Rep is Mike Santiago)