5 Homes on one 3 acre lot in Maryville TN

[William Bratrud]

Investment Info:

Large multi-family (5+ units) buy & hold investment in Maryville.

Purchase price: $425,000
Cash invested: $100,000

A little over 3 Acres with 5 single family rentals in a park like setting! These houses were neglected and the property needed lots of love. 6 months later everything has been renovated and market rents have exceeded our expectations. See the before and after photos of a couple of the homes.

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

At a little over 80K per unit this met all of my criteria for a good investment in this particular market. I think the locals may have been perplexed at the asking price given the condition of the property but it really just needed a little love, like 100K+ worth of love! I also loved the fact that although these were all on one lot each house had its own water meters and electric meters and trash service paid by the tenants! it doesn't get any better than that....

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

I found this like I find most of my deals.....Checking the MLS daily! Knowing what my price point is, what Im looking for, and being ready to jump all over it the second I see it. You gotta have rounds in the barrel and safety off in a market like this. I offered all cash 10 day close no contingencies, YIKES!.....I hate sellers markets! Unless Im selling of course....

How did you finance this deal?

Cash from a money partner.

How did you add value to the deal?

We invested a little over 100K to rehab most units inside and out and got everything up to market rent.

What was the outcome?

This is an excellent property with exceptional cashflow and after our repairs and remodeling it has nearly doubled in value creating a ton of equity on top of our rental income. There a plenty of exit options down the road with this one, heck we may even consider sub dividing and selling them off as individuals for around $200K each, but for now we are enjoying the cashflow.

Lessons learned? Challenges?

This was my largest cash purchase to date so that was a little stressful, we are encountering some challenges in the refi stage as lenders don't know quite how to treat the asset. We may have to sub divide a parcel to make it 4 SFR on one lot and the MFG home on another. Thats definitely something to consider if you ever buy a property with a single family home and a manufactured home on a single lot, lenders don't want to touch them!

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

I sure did, Carlton is a great agent in Maryville TN, but hey Im a great guy too so if your looking to invest in east TN lets connect and see if I cant find what you're looking for.