Small multi-family (2-4 units) buy & hold investment.
Purchase price: $330,000
Cash invested: $20,000
Purchased a 1700sf 3BR 2BA cape with attached 2 car garage for 285k. Bought it in 2 deeds: one with the house on it and the other with just a vacant lot that was zoned for permission to build a duplex. I have the cap rented for $2200 a month after putting about $4000 of work for new paint and flooring. It's tented to a corporation with a three year lease. I cas flow after PITI $350/mo on the house.
The duplex is currently being built. The after built value appraisal came in at $436k. I managing the new construction. I’ll have about $100k equity off the bat. Thanks plus, the 1400sf 3BR 2 BA units should rent for about $1700 per unit. I’ll cash flow between $1200 and $1600 on the duplex.
What made you interested in investing in this type of deal?
The free duplex lot. Undiscovered potential of the property in the zoning it was in.
How did you find this deal and how did you negotiate it?
It was on the MLS. The listing broker incorrectly or generically listed the zone the house was located.
How did you finance this deal?
Traditional financing. We were going to move into the cape but decided to rent it instead.
How did you add value to the deal?
Aesthetic rehab to the existing house. Surveyed and split the property to create a buildable lot.
What was the outcome?
So far so good. Duplex isn’t rented yet.
Lessons learned? Challenges?
Make sure that the mortgage company does not attach itself to the lot you are splitting from the property as doing a partial release after the fact wasted 6 months of time.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
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