Small multi-family (2-4 units) fix & flip investment in Somerville.
Purchase price: $1,125,000
Cash invested: $725,000
Sale price: $1,900,000
This was a complete gut down to the shell. We added dormers to the third floor and dug out the basement to give 8'+ ceilings in the garden level (basement) which added two bedrooms, two baths and an entertainment area. We ran into issues during construction which killed our budget and the market softened when we went to market. We took a little bit of a hit on this one, but we are extremely proud of the product and have a much better feel for what it takes to get things done in Somerville.
How did you find this deal and how did you negotiate it?
MLS. Made an all cash, 30 day close offer.
How did you finance this deal?
Local bank financing, 80% of the acquisition and 90% of the construction cost.
How did you add value to the deal?
Added livable sq. ft. in the basement and third floor attic.
What was the outcome?
Great product, happy buyers, not a financial success, many lessons learned...
Lessons learned? Challenges?
Somerville is very particular about landscaping requirements. Need to do much "fatter" deals when the renovation is extreme.
Awesome recap, thanks for sharing! Which bank did you end up using? Somerville is red hot, I think the only play I would make right now in the ville at this point would be to try to find a value add multi that I could add another unit (RB zone with enough land sq ft). It's a by right project( currently, zoning is changing soon and will no longer be under the current proposal) . Good luck on your future projects, thanks for cleaning up another house in the ville!!
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