Old Victorian Triplex

[Aaron Malejko]

Investment Info:

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

Purchase price: $210,000
Cash invested: $5,000

c 1886 Triplex. Near downtown. 3300 sq ft. Two 2 bed/1bath, One studio/efficiency unit. All with washer/dryer hookups and kitchens. Run down "garage"

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

We really wanted a small multi-family and this one was aging on the market and in the neighborhood I like to focus on.

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

MLS. After some research, I determined seller was outside of the area, behind on taxes, building was falling into disrepair and she was using a hands-off property manager. I smelled desperation, offered $210K on a list price of $250K and she took it.

How did you finance this deal?

First hard money lender. One of the 3 units was not fit for habitation making it difficult to meet anyone's underwriting guidelines. Hard money lenders were not easy to find that would lend in this small town. Now the race is on to get the 3rd unit done so we can refinance.

How did you add value to the deal?

Mostly done remodeling 3rd unit. Have to redo some interior walls and ceilings due to previous water leak from upstairs unit.

What was the outcome?

Upstairs tenant's lease expired and moved out, so we furnished it and rent it out to traveling nurses for a lot more than a long-term tenant.

Lessons learned? Challenges?

Finding the time. I'm still working full-time, so I work on it when I can. Fortunately my wife/best friend/partner/accountant/assistant is also awesome with sheetrock and paint. Get second opinions! Furnace is c 1970s and was flaking out. One expert wrote it off as a cracked heat exchanger and quoted a whole new system. Second expert found the problem with the pilot light and fixed it for about $100.

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

Salt Funding - Hard Money Lender in Denver, CO.