My 3rd Deal - Primary Residence Turned to 2 Units

[Kiril Nikolaev]

Investment Info:

Small multi-family (2-4 units) fix & flip investment.

Purchase price: $640,000
Cash invested: $70,000

This is in Ontario Canada. Not in the U.S.
This is actually our primary residence. My wife and I did most of the renovations ourselves. We wanted to keep it but decided to upgrade to a bigger house instead. We originally wanted to house hack this and so we built a kitchen in the basement, soundproofed the basement ceiling, and added another bedroom. We also rebuilt the entire upstairs and made it very modern.

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

I wanted to house hack and live almost free.

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

MLS. We saw it on the market for a few months. It was in bad shape. We made an offer way below what they were asking. They countered a couple of times until we reached a reasonable price.

How did you finance this deal?

A lender.

How did you add value to the deal?

Upstairs - opened up the kitchen, rebuilt the kitchen, new appliances, build a dropceiling, added wallpapers, repainted, new flooring in the living room and kitchen, new ELFs, baseboards, crown moulding, separate laundry, and closed-off the basement.
Downstairs - built kitchen, soundproofed ceiling (2 layers of insulation, 2 layers of 5/8 drywall, green glue), 200 AMP service upgrade, converted a storage room to a bedroom and repainted.

What was the outcome?

The renovation upstairs was a success overall.

Lessons learned? Challenges?

Closing off the basement completely was actually a mistake since many buyers were looking for access to the basement.
The basement kitchen could have been much better for a little extra effort. If I would have known what I know now, I would have done it differently. But you live you learn. I'll know for the next one.