All Forum Posts by: Jason Gordon

Investment Info:

Small multi-family (2-4 units) fix & flip investment.

Purchase price: $434,000
Cash invested: $66,000
Sale price: $600,000

Fix and flip 4 plex in Mesa, Arizona. Property needed a lot of work and the area was a little sketchy.

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

The cap rate at the accepted offer.

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

We ran the numbers on 80+ properties and FINALLY found this one and the other 4-plex posted here.

How did you finance this deal?

4 Partners. 25% down payment.

How did you add value to the deal?

The market rents were very low and the building recently appraised more for listed price. We visiting the property and could see it didn't many major repairs it was just a poorly run apartment complex. Lots of trash everywhere. People blasting music, stucco missing from everywhere, etc.

What was the outcome?

Fixed it up, raised rents on new tenants to market rates, fixed the roof, replaces air conditioners, washers, dryers, hot water tanks, stucco repair, and paint.

Lessons learned? Challenges?

Don't buy property in sketchy area. No matter the CAP rate or income potential. Own properties you would live in.

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

Yes

@Jonathan Giglio If you look at the entire real estate market as a whole, then it may seem like it would have been better to buy real estate somewhere during the past 10 years.  It may appear that buying real estate now is buying it at the top of the real estate market.  So in that sense, the people are telling you the truth according to what they under stand about the real estate investing market.  However, real estate is not general for most people.  It is specific for most people.  What I mean by that is, investing in a specific town, or neighborhood, or a specific asset class may not follow the general real estate market trend.  In other words, you got general advice.  And when it comes to investing a a smaller scale, you are looking for specific advice.  

You have already received a lot of good specific, good advice on this thread but I will add just a little more.  My advice is connect with someone in your market that is doing well and find out how he or she is doing well with investing and then copy that model for a while until you find something else that is profitable that interests you more.

Here is a list of our investment strategies that we are doing right now that are working out very well for us right now.

1. Buying single family homes in Greensboro, NC under market value and renting them out on lease options (the BRRRLO model).

2. Following the BRRRLO model in the triad area of North Carolina and in Arizona.

3. Selling properties that have appreciated a lot and doing a 1031 exchange into other properties that we can BRRRLO or into small multifamily properties or mobile home parks.

4. Buying mobile home parks.

5. Building a tiny house village.