Accidental Brrrr in Charleston, SC

[Kenji Otokawa]

Investment Info:

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

Purchase price: $215,000
Cash invested: $50,000

Bought a SFH on a large lot in 2014. Last year we decided to add another home on the lot, fix the current home up, and list it for sale. Our timing was bad as we listed right before COVID hit. We were unable to achieve our asking price, so we decided to rent and refinance. We got most of our construction costs back and have a cash flowing asset in a great Charleston neighborhood that gets better every year. We had a backup plan, and we executed it. Not the outcome we wanted, but it worked out!

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

Great location for buy and hold. After 6 years of ownership we saw opportunity to add value to the property and sell.

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

MLS in 2014. Did not really negotiate.

How did you finance this deal?

Conventional loan for 2014 purchase. Construction loan for the 2019 project.

How did you add value to the deal?

We added a 3 bedroom 2 bath home to this property.

What was the outcome?

Unable to sell the property at the beginning of COVID, we decided to rent it out and refinance it. We got most of our cash back and now have a nice cash flowing asset. Both houses have all new everything making for less maintenance. The downtown Charleston neighborhood continues to get better as well.

Lessons learned? Challenges?

Glad we had a backup plan since we were unable to sell!

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

Bennett Construction and Realty