First 2 unit property in Portland, Maine

[Sebastian Libonatti]

Investment Info:

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

Purchase price: $535,000
Cash invested: $135,000

First two unit, bought it off market from an exhausted landlord who didn't want to spend more time dealing with tenants (he was renting by the room so obvisouly tough!). We are now renovating the first floor (cosmetic, adding washer/dryer, etc) and expect to increase rent easily by 400$/month. Then we are renovating end of august the second unit which is a 3Br (large ones) + 2B. Expecting to increase monthly cash flow to $1300/month to reach our 10% CoC goal. Will refinance shortly after to get our rehab $ back. And looking for more in the area!

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

First experience into multifamily, potential to achieve 10% CoC quickly- and more.

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

off market deal through a broker. Negotiated electrical work to be done as part of final price as well as other smaller issues.

How did you finance this deal?

Conventional loans which is what I want to avoid in the future. I'd like to have not more than 10-15% equity instead of 20-25%.

How did you add value to the deal?

I'm in the process of rehabbing both units for $30-35k, new tenants soon, adding washer/dryer, painting all, rehabbing kitchen, bahtrooms, fixtures, carpet/wood floors conversion, etc.
Biggest value driver post new tenants and rehab is the possibility to add another unit as an ADU and increase cash flow significantly. Zoning and lot size should allow for it, working on it!

What was the outcome?

We'll see very soon, rental market very strong and we should achieve easily our 10$ CoC goal and refinance to get our rehab cost back, hopefully more but don't want to be overly optimistic.

Lessons learned? Challenges?

Better roof inspection next time, find contractor to get an estimate (still don't know if needs some work or not in the short term).

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

Tyson Wilkins from Way Point Brokers