New duplex acquired, now own the entire lot

[David Collier Jr]

Investment Info:

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

Purchase price: $315,000
Cash invested: $40,000

Buy and hold duplex in up and coming area. Forced appreciation and room to drastically increase rents.

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

The duplex shared a driveway with one I currently own. I now own two large lots side by side. Each duplex is the same build so I am very familiar with the structure and layout.

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

When I was doing the inspections on my first duplex I told the property manager that I was his buyer for the one next door. It took two years of bugging he and the owner but she finally agreed to sell.

How did you finance this deal?

3.5% FHA loan; personal cash for down payment and rehab.

How did you add value to the deal?

Currently updating the units and property. Adding central AC, impact windows, floors, landscaping, etc.

What was the outcome?

Should cash flow around $1250 after primary res seasoned, tenants in place and REFI.

Lessons learned? Challenges?

Never give up on reminding an owner you are willing to purchase their property. Spend the money to get things up to date such as central AC versus window shakers. If the property is buy and hold the good upgrades will mean less repair and maintenance in the future.

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

Off market deal. I am also a licensed RE agent however there was no commission on my side.