Small multi-family (2-4 units) fix & flip investment.
Purchase price: $60,000
Cash invested: $7,400
Sale price: $160,000
This turned out to work out for us, even though our intention was to rehab it and hold it as a long term rental. The City of Gardner has specific standards regarding vacant multi family properties that made it tough to achiever our objective. We sold for a good price and the buyer got solid value because Gardner is an appreciating market, the new buyer's intention is to fix it and rent it (we resolved all of the issues with the City of Gardner prior to the sale) so it will be a great investment for him as well.
What made you interested in investing in this type of deal?
Gardner is my home market, the property had been vacant for years & previous short sale attempts had failed. We were able to connect with the owner and he was willing to work us on a sale. We referred the seller to LAER Realty Group, Al Sciola runs an excellent team there, they brokered the sale & everything worked out.
How did you find this deal and how did you negotiate it?
Called through non owner occupiers, the Seller had tried to sell the property before but failed to; we agreed on a price, I then referred him to an excellent short sale broker who negotiated the sale.
How did you finance this deal?
Hard money loan.
How did you add value to the deal?
We bought the property at the right time, we also invested a lot of time in negotiating with the lender on their appraisal results; the initial appraisal came in at $95,000, we pulled together a detailed report and were able to get them to accept our $60,000 offer. We also cleaned the house out ourselves. We did this to save money on the renovation budget, but in the end it was a value add to the Buyer (took 5 days to clean out & 3 dumpsters).
What was the outcome?
We made a reasonable return on our money.
Lessons learned? Challenges?
Vacant properties require multiple approvals from the town before proceeding with any type of renovation.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Al Sciola, of LAER Realty Group
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