Hidden Gem of a Duplex in Council Bluffs

[Owen Dashner]

Investment Info:

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

Purchase price: $155,000
Cash invested: $1,000

This is a purpose built duplex in Council Bluffs, Iowa that we bought from another investor who was looking to sell and 1031 into something bigger. The interiors of both units were in fantastic remodeled shape and way under rented. One unit is 3 bed, 1 bath, the other is 2 bed, 1 bath. The 2 bedroom unit vacated shortly after we purchased, and we raised rent from $650 to $995. The other side is rented for $850, which is also low.

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

Off market, well-maintained, value add, built in equity - everything that we love!

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

The owner was referred to me by a mutual friend who I had asked about buying some of his properties. We bought 2 duplexes from this seller and offered cash, as-is with a quick closing. He liked the "no headaches" offer and worked with us on price.

How did you finance this deal?

We bought it with our LOC, then got it appraised ($190K), then got a cash out refi into a 20 year am note at 4%. We have no money into this deal and it still cashflows well.

How did you add value to the deal?

We are going to put new siding on it to give it more curb appeal, but that will be a spring project. We will be renting out the 3 bed side for $1100 once the existing lease expires.

What was the outcome?

Cashflowing rental with no money into it, and good residents with little deferred maintenance.

Lessons learned? Challenges?

Tell everyone you are looking to buy properties (and be specific about what you are looking for). This deal would not have happened if I had not told my friend what I was looking for.