Two-fer-one purchase, two single family homes on one lot

[Jennifer Hoover]

Investment Info:

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

Purchase price: $20,000
Cash invested: $7,200

This one is two, single-family homes on the same lot. Each has three bedrooms, one bath and share a cute common area / yard in between them.

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

The home is in one of my targeted neighborhoods for purchase. It's less desirable and stigmatized, with approximately 45-60% of the homes being either foreclosed, boarded up, or in moderate to extreme disrepair. I believe the social and economic factors that pulled the neighborhood down can be reversed slowly over the next decade, and that the location, layout, and style of the neighborhood are truly worthy of a restoration and reinvention. The City of Little Falls is remarkably overlooked.

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

This deal was on the MLS. I'm a licensed agent for Coldwell Banker Faith Properties, so I negotiated directly with the seller's agent. I actually passed on this deal to begin with, but the sellers came back to me with a lower purchase price, and I took it.

How did you finance this deal?

This was a cash deal.

How did you add value to the deal?

I just closed this week, but work is starting on the first house. Even before closing, there was additional value in the deal because if needed, one of the homes could be split off and sold for an influx of cash and then the property retained would essentially be free or better.

What was the outcome?

Just started.

Lessons learned? Challenges?

I'll try to update this as I get further along in the project, but right off the bat, it was a reminder to look at everything on the market that fits your criteria. I didn't bother looking at this one for MONTHS, and even looked at several around it. Finally on a lark, I said OK, let's see this one just for kicks... and put in an offer that day. Sometimes you gotta get eyes on a deal before it clicks. If you aren't looking at properties every month, you're definitely missing deals.

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

I'm a licensed agent specializing in the area, so I represented myself. I also worked with Emrich Land Surveying who performed an in-depth survey of the property and surrounding area. I cannot say enough about their professionalism!