Great 2 Family, Fix Rent and Someday Sell

[Holly Davis]

Investment Info:

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

Purchase price: $700,000
Cash invested: $400,000

A 2 family that generates $6,000 per month in income.

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

The property was very inexpensive but needed work. When I did the math I saw we could buy it, fix it, and rent it for very positive cash flow and profit.

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

In this case, a drive by. I saw it had been on the market for a long time (250 days) and so I identified the listing realtor and began a negotiation.

How did you finance this deal?

Mix of cash and a home equity line of credit (HELOC)

How did you add value to the deal?

New kitchens, bathrooms, paint, and some infrastructure.

What was the outcome?

The house is worth far more than I have invested in it, and the cash flow and profit is huge.

Lessons learned? Challenges?

The challenge was estimating the costs of the renovations accurately. In this case I did so (based on experience) and it paid off very well.

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

Not that I would recommend.