Income property with potential mixed-use development
Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Cash flow income property with a potential of scalable mix-use development (apartments + retail ) next to one of the commuter rail stops in the town.
What made you interested in investing in this type of deal?
Income, and value appreciation because of the limited supply in the area where we had invested time in living and learning about the market.
How did you find this deal and how did you negotiate it?
Sent letters to all 4-families in the area along the commuter rail in-and outbound of Boston. The owner responded to our letter and we started to talk about him selling to us, would make it a quick and clean deal.
How did you finance this deal?
some private loan, our bank savings, and a commercial loan
How did you add value to the deal?
Successful with a creative approach, and a great learning experience.
What was the outcome?
Pretty good, the property is stabilized and generates stable monthly income for us. The development opportunity is still promising though it could be years down the road. We need time to save and accumulate principal to invest in future development anyway.
Lessons learned? Challenges?
In order to get the deal, we agreed to let the previous owner live in the owner occupant unit for another 3 months for free so he could have time to use the payment from selling this property to close on another house and help cover his moving expenses. The 3-months were the most problematic 3 months that we had ever been experienced since investing in multi-family real estate. We learned that having the ex-owner stay for a while for free was not a wise decision.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Myself, the real estate agent.