Re-envisioning a tired duplex in to a thriving 5 unit.
Investment Info:
Large multi-family (5+ units) commercial investment investment in Los Angeles.
Purchase price: $375,000
Cash invested: $455,000
My wife and I purchased a tired 2/1 duplex with a bigger lot 8500 sq ft. Zoned RD 1.5 for 5 units. Complete rehab of the duplex and now currently in the process of finishing up the addition of 3 units to the backside of the property.
What made you interested in investing in this type of deal?
The duplex was in need of a complete rehab. The price was great for the area and the property is zoned for 5 units. The property is located in a up and coming area and close to local transit/freeway access.
How did you find this deal and how did you negotiate it?
On market deal that we were quick to pull the trigger with the highest cash offer.
How did you finance this deal?
Cash
How did you add value to the deal?
This property was distressed and in need of a complete makeover to bring to market rents. We completely remodeled the duplex to the studs, added central HVAC (forced heat and window units previously). This initial part of the deal was amazing, but with the zoning allowing 3 additional units we decided once the front units were completed to move on the 3 additional units in the rear of the property. One 3/2 and two 2/1 units.
What was the outcome?
The results for the duplex were as good as I had hoped numbers wise. We have tenants in both sides of the duplex. For our first rehab deal, it really motivated us to look further in to developing the rest of the property given the acquisition costs of an additional property in the Los Angeles area. We are literally one month (fingers crossed) from bringing the 3 back units on line.
Lessons learned? Challenges?
Learned a LOT about what goes in to turning a property around and taking it to the next level.
Challenges include timelines of inspections, pulling permits and the time crunch especially with the current Covid-19 challenge.