Subject To Duplex for only $2,000.00
Investment Info:
Small multi-family (2-4 units) other investment.
Purchase price: $116,000
Cash invested: $2,000
I was able to acquire this property through another 'Deed in Lieu' (Subject To) deal. I paid for closing costs and moved into the property. This is a duplex, so the other unit is being renovated with the intention of being an Airbnb property. The price point for Airbnb's in this area at a minimum is about $80/day. Conservatively I will expect $60/day. After paying off the mortgage of $841 I will be cash flowing approximately $900/month.
What made you interested in investing in this type of deal?
I didn't have to qualify for another loan. I was able to acquire the property with very little money put into it. The location of this property is ideal and the rental rates are above average. This property will increase my portfolios cash flow substantially and will be one of the first properties I pay off entirely over the next 3-5 years.
How did you find this deal and how did you negotiate it?
A previous client was forced to move out of state due to the military. They just found out that they were about to have their first child. They wanted nothing more than to get rid of the financial obligation of the home. I was able to help them out by taking over the payments and giving them some money for future child expenses.
How did you finance this deal?
I covered the closing costs of $2,000 with cash. That is all I was responsible for.
How did you add value to the deal?
I renovated the second unit and decided to Airbnb it. This will more than cover my mortgage and utilities for this property. I will be living with all expenses covered. Essentially living for free.
What was the outcome?
The outcome is that the seller is extremely happy and so am I. Cashflow is increased to allow me to invest in more profitable properties in the near future.
Lessons learned? Challenges?
Communication is key. I found that even though I was comfortable with the process, I still needed to take the time to explain it thoroughly to the seller. Even after the deal closed I needed to continue to guide the sellers through the process.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I used a specific investor savvy attorney here in North Carolina that is very well known for his flexibility and comprehension of real estate investing. Contact me directly if you want to know who he is.