Getting our Feet wet in REI

[Carol Brindley]

Investment Info:

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

Purchase price: $53,250
Cash invested: $2,272
Sale price: $84,900

First project was supposed to be a buy and hold BRRRR but became a sort of fix and flip. Purchased this off market double. The plan was to do a full rehab and increase rents. But with the escalating sales prices, we decided to try to sell first. We also felt bad about trying to relocate the 2 long term tenants during the middle of COVID19. The profit was nearly $30k in a few months.

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

My Broker had been managing this property for the owner for over 15 years and he was ready to sell and accepted a below market price.

How did you finance this deal?

Private money (family member). I paid interest 6% interest only payments.

How did you add value to the deal?

The market added the value for us.

Lessons learned? Challenges?

If it were not for COVID, the plan was to relocate one of the tenants and rehab that side. Give the 2nd tenant the option to move over to the finished side for increased rent or relocate them. The rents which were never increased in the 20 years they were there were $450 per side and market rents are $700. We would have cash flowed over $500 per month or we could have sold for $120k after rehab. We opted for something in the middle.