Sold the tri-plex in Portsmouth VA.

[Chris A.]

Investment Info:

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

Purchase price: $215,000
Cash invested: $36,000
Sale price: $280,000

Contributors:
Anthony Pinto

This was my first partnership and (almost) turnkey quality property. It just needed appliances and a fence installed. The partnership was established through an LLC and property management was put in place to manage the tenants and any minor repairs.

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

One of the partners approached me with the opportunity and I decided to take the plunge. Having never done a partnership, I was a little hesitant at first, but super thankful to have the opportunity to be involved with it, gain some valuable experiences and step outside my comfort zone.

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

Anthony found the deal (on the MLS I think), and he brought it to me. I had known him via a common connection and attending several REIA and meetups in the area. The three of us came up with the structure and splits, then created an LLC to establish the partnership. Once that was complete the partnership purchased the duplex.

How did you finance this deal?

I brought 3/4 of the down payment, Anthony got the mortgage with a local lender and the other brought the rest of the down payment.

How did you add value to the deal?

We added appliances, a fence and some foundation/ crawl space work. The rest of the value was based on the rising market/increased demand.

What was the outcome?

It was an excellent experience, being able to sell in about 2 years for 65k extra was nice for sure. I think the real value was in the experience of partnering with others, forming the LLC and working together. Through this investment I have become more comfortable with other types of investments, partnerships and syndications.

Lessons learned? Challenges?

There were challenges though, some tenants decided not to pay during COVD which hurt the cashflow for a while, also we had to do pretty extensive cleanup and some repairs when they left. The appreciation was good and that made the overall investment returns turn out really well despite the cash flow challenges during the pandemic.

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

Dan Grub with AB&B Credit Union was great to work with.