Quad Plex investment property

[Quinn Barnett]

Investment Info:

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

Purchase price: $160,000
Cash invested: $23,000

Contributors:
Acree, Mark

An old large house near downtown Lynchburg that was originally a duplex but got turned into a spacious quadruplex with two 1 bed, 1 bath units and two 2 bed, 1 bath units. It has a hodge-podge paint job at the moment.

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

I was looking for a quad to buy with an FHA originally for a low down payment, high cashflow deal. I was told about this one and it was a quad with room to build equity by updating it which fit well with our goals.

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

Through a realtor/investor friend who did not want it himself. I negotiated by spending time getting to know the seller and what he wanted out of the situation and helping him get that while not over extending ourselves or purchasing a bad deal.

How did you finance this deal?

It would not qualify for an FHA loan, my initial goal, so I got a family member to partner with me to purchase it under a conventional investment loan with 25% down, 30 year mortgage.

How did you add value to the deal?

Fixing leaks in a bathroom that was dripping into the downstairs unit's kitchen, fixing a leak in the roof, wrapping the windows' trim in metal, having new/working gutters installed. Eventually we will repaint it.

What was the outcome?

Still working on the updates and removing a tenant. Once the new tenant is in, we will be getting $115/door of pure cash flow. We might sell it or refinance in a year if the numbers are right.

Lessons learned? Challenges?

Working without an agent on my side or the buyers side meant we had to do some leg work between contract and closing but it was not as hard as I anticipated

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

Mark Acree of the Acree Brothers Real Estate Team, top notch agent/ investor who cares about the people he is helping.
TJ Kuczewski at McLean Mortgage and his team did a good and smooth job getting us to the closing table