6 unit building that was listed on the MLS. 4 residential and 2 commercial units. The rents were ridiculously low and there is a good bit of deferred maintenance and updating needed. The strategy is to get the commercial spaces leased out ASAP after a light cosmetic rehab. They both have newer gas furnaces. Upstairs we are changing the 4 residential spaces to ductless mini split heat/ac, and have sub-metered the water for the entire building. One of the residential units is vacant and we are renovating that and plan to rent it out for $1,250-1300. There are three other residential units that have tenants. We did an increase for one unit to $1,000 and are planning to give notice to the other two tenants. Once those units are emptied, we will renovated and rent them for $1,300. With the purchase and rehab we will be into the building for roughly $620,000 and it will be bringing in $7,000 plus per month once stabilized. The other big plus is that it is a quarter mile from our office head quarters.

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

Cash flow investment.

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

It was the first deal I have bought off the MLS in years.

How did you finance this deal?

We took an interest only loan from a local credit union that includes a construction component.

How did you add value to the deal?

Sub metered water. 4 new ductless mini splits in the residential units. Paint/flooring in the common hallways. Painted the front commercial exterior. Renovated the one vacant residential unit. Renovated and modernized both commercial units.

What was the outcome?

In the middle of the renovations now. We should be all in for about $620k and the building will be worth roughly $750k so we will have $130k in equity at the end of the project. We are conservatively projecting to have the property rented for $7,000 per month once stabilized.

Lessons learned? Challenges?

The challenges are with the inherited tenants who were paying $650, $700 and $800 per month for two bedroom apartments. Market for these units once they are updated is roughly $1,250-$1,300. There is also some water damage/rot on the back wall of the building that will require a good bit of time/money to repair, but we new about it prior to the purchae.

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

I am a broker, and I represented us as the buyers agent. We used Align Credit Union for our financing and Attorney Anthony Takis out of North Andover for our legal work.