Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $225,000
Cash invested: $56,000
Purchased 4-plex from a wholesaler. No vacancies when I took over and at a 9.2% CAP. Plan to make some tenant improvements to push rents closer to market rate for the area. Goal is to get it up to 11%-12% CAP within the next couple year. his is a buy/hold property as an entry into multifamily.
What made you interested in investing in this type of deal?
Have been wanting to get into muti-family instead of single family properties.
How did you find this deal and how did you negotiate it?
Found it through a large wholesaler who works in multiple states. They provide the properties along with their insights and a home inspection. They are investors as well and have good contacts in most markets they sell properties in, insurance, property management, etc.
How did you finance this deal?
purchased in cash from wholsealer. Did a DSCR loan after 6 months to pull the bulk of the cash back out.
How did you add value to the deal?
I will plan to improve the common areas, property fencing and siding. 3 of the 4 units have been turned in the past few years so there is not too much to do inside. The last unit has a long term tenant (10+ years). While I appreciate that & don't want to push them out, they are well below market rate & the unit is a disgusting mess, approaching hoarder status. I am hopeful they will want to work with me to get things repaired and updated to validate appropriate rent increases.
What was the outcome?
Plan to keep for a minimum of a few years to see what I can do with it.
Lessons learned? Challenges?
The biggest challenge will be with the one long term tenant. Her unit needs to be improved or I fear that the costs to fis it up will grow without decent maintenance.
