South Philly Duplex Conversion

[Dan Powers]

Investment Info:

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

Purchase price: $160,000
Cash invested: $150,000

This was a fantastic opportunity my investor jumped on as soon as it was released. This property is located right between prime Point Breeze and West Passyunk. What made this property special was the legal ability to convert it to a duplex. With duplex comps selling in the range of 535-545k, there was a huge spread to make on this project.

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

What made my investor interested in this deal was the ability to convert the property to a duplex. While rehab wise it was going to need a full gut anyway, with the option of potentially adding a 3rd story and making the ARV even higher, the base numbers still satisfied my buyers. Also with 2 new build duplexes as the neighbors, by the time they complete their project the refi value could be even higher.

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

This deal was sourced through New Western Acquisitions. It was sold as a 24 hr highest + best, with the starting bid at 150k, thankfully this particular property was released on a Friday with bids due on Saturday, so less bids were submitted then normal which allowed my buyer to only have to submit a bid 10k over ask.

How did you finance this deal?

This deal was purchased with cash.

How did you add value to the deal?

The value being added to the home is extensive, first a complete full gut of the interior, all mechanicals + cosmetics. Now the conversion process for the duplex could keep the existing structure as a 2 story, or their is the possibility of adding a 3rd story which will boost the value even more.

What was the outcome?

The outcome is going to be a great 2 unit property, in an established area that is only going to continue to appreciate

Lessons learned? Challenges?

The only challenge endured during this property was the decision to either keep the existing 2 story structure or add a 3rd story.

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

Dan Powers - New Western Acquisitions