Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $840,000
Cash invested: $285,000
Full renovation of all 4 units. All original tenants were long term low rent tenants. The first hurdle was convincing them to leave via cash for keys. It went pretty smoothly luckily. Each unit was Redone inside. Some more than others. two units had wood floors that we kept. But one unit was a full redo. Even new windows. We haven't decided if we want to keep this or sell it. It would be a good 1031 exchange since we forced a good amount of appreciation. I threw in one of the before photos so you get the idea of what we started with.
What made you interested in investing in this type of deal?
It was an obvious value add project.
How did you find this deal and how did you negotiate it?
This was an off market deal brought by our agent.
How did you finance this deal?
We used funds from a 1031 exchange to secure the property. Then used personal investment for the rehab.
How did you add value to the deal?
We renovated all 4 units. This brought the low rents up to market rent. The average rent when we took over was 800/unit. Now the 3 one bedrooms rent for 1900 each and the 2 bedroom separate little house rents for 2400.
What was the outcome?
Outcome has been great. Honestly a few of the tenants are having a hard time paying the rent. They always pay but very late usually. I think rents are just almost to high in some areas.
Lessons learned? Challenges?
This was one of two properties that we were renovating at the same time. Ive definitely learned some things about project management. Some things I might do differently next time. But good overall.
