small multifamily with upside potential

[Tom Felton]

Investment Info:

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

Purchase price: $115,000
Cash invested: $36,000

large double and single manufactured home on one lot with sufficient parking.

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

close to home, able to increase rents substantially.

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

realtor sign went in the front yard and we scheduled a showing right away. We negotiated with the ability to close rapidly and allow the seller (Senior) to hold a note for part of the deal which she wanted for her monthly income.

How did you finance this deal?

seller finance

How did you add value to the deal?

Bumped one unit straight away from $500 to $650, andthe second unit from $610 to $700. Existing tenant moved out over the $700 rent which encouraged us to rehab the unit and we are now at $850/m on that unit. The rear unit remained occupied until just recently when they purchased their own house. We rehabbed this unit and just started marketing at $740 (was $600).

What was the outcome?

We have some capital wrapped up in rehab; however, this will be a long term cash cow going forward.

Lessons learned? Challenges?

Know your market.