Deals can still be found
Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $113,000
Cash invested: $1,000
Duplex in Palmyra, NY. Fully rented with long-term tenants.
What made you interested in investing in this type of deal?
My investment strategy is small multi-family properties that do not need a lot of work. This deal was turn-key but I am fixing some deferred maintenance items.
How did you find this deal and how did you negotiate it?
MLS. This deal connected me to the seller's real estate agent who was excellent. I decided to use him as my agent as well and I ran the numbers and made my absolute best offer based on the numbers that would work for me. There was a competitive cash offer with no contingencies but my offer was a few thousand higher with an inspection and finance contingency. It was accepted. Using some minor issues found during the inspection, I asked for a $1,500 concession and it was accepted.
How did you finance this deal?
25% Down and a conventional 15 year balloon loan. Amortizing the loan to 30 years, makes the COC work for this deal.
How did you add value to the deal?
The deal is a good deal in my market. We are getting an influx of out of town investors which has been driving up pricing. The deals that were available even a few years ago are getting snapped up fast.
What was the outcome?
My CAP rate for this one is around 8% after I market adjust rates but even without doing that the COC return is 10%.
Lessons learned? Challenges?
Verify everything.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes, if you are in the Rochester, NY area, please connect with me and I can make some introductions.