The Hudson Valley, NY 3-Plex BRRRR that wasn't!

[Remi Oguntoye]

Investment Info:

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

Purchase price: $170,000
Cash invested: $70,000

I got this property under contract in December 2019. Initially my partner and I thought we would be able to quickly renovate the 2-family and convert it to a 3-plex and recoupe our investment. After a lengthy eviction process and the outbreak of covid. I closed on 7/1/2020 in the laundry room of my apartment in NYC. Renovated the entire property long distance from Maryland. Timeline and original budget were no where near actual. But I am grateful for the experience gained. Ready to do it again!

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

Multifamily properties have higher cash flow and are shielded from vacancy risk slightly. I chose Poughkeepsie because I lived in New York City, and I could not afford to invest there.

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

MLS deal using realtor from Zillow

How did you finance this deal?

Personal liquidity and private money for the downpayment. Hard-money for the financing

How did you add value to the deal?

I thought I would be able to convert the attic to a 1BR apartment, but that turned out to be cost-prohibitive.

Lessons learned? Challenges?

Your first deal will take longer and cost more than you expect.
No need to pay for architect if no structural changes occurring.
It's very expensive and difficult to convert from 2-family to 3-family.
Have a bulletproof contract with any contractors.
Using hard money for first deal may be more challenging and involved than you think.
Evictions can take a LONG time.
Your first deal will be an emotional rollercoaster.
Remodeling a property remotely is challenging.