Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $250,000
Cash invested: $18,000
We recently purchased a mismanaged 4 plex for $250,000 with about $18,000 in repairs, we raised the rents on each unit and get about $1,600/ mo in positive cash flow with a new appraised value of $323,000!
What made you interested in investing in this type of deal?
I like 4 unit properties because they tend to cash flow very well in my area being close to LSU.
How did you find this deal and how did you negotiate it?
I tell all of my landscaping clients that I invest in real estate and one of them reached out to me after bugging her for years. She was ready to get out because she was consistently losing money each month on it. So after a few weeks of back and forth we settled at $250,000.
How did you finance this deal?
It was a seller financing deal
How did you add value to the deal?
We installed new flooring, paint, appliances, repaired a staircase and minor touch ups to each unit, filled 2 empty units and bumped the rents on the 2 occupied units. The occupied units were $160 under market rent at purchase
What was the outcome?
We now have a great asset that has a positive cash flow of $1600/mo with equity
Lessons learned? Challenges?
To always tell people what you do, just because they aren’t ready to sell right away doesn’t mean they won’t want to sell in the future
