Turned Run Down Four-Plexes into Inviting Home for Residents
Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $225,000
Purchased run down set of two 4-plexes that was 50% vacant with much deferred maintenance. Several of the apartments were completely trashed and filled with garbage and left behind personal belongings. This property has now been 80% rehabbed and cash flow has increased significantly. Property value has doubled in two years.
What made you interested in investing in this type of deal?
It was a great opportunity to clean up the neighborhood where I already owned a building. This property was the eyesore on the street and my current residents didn't like looking out their front window at the mess across the street. I knew I could help!
How did you find this deal and how did you negotiate it?
One of my current residents talked to someone living in these apartments and expressed my interest in purchasing. About a year later the owner passed away and his children were looking to sell the property. They had a lot of sentimental value towards the place since their dad had built it and managed it for 30+ years. They wanted to see it got to someone who would take care of it. We did most of our negotiations over coffee and both walked away feeling we had benefitted from the deal.
How did you finance this deal?
Seller carryback of 20% of purchase price and then conventional loan for the remaining 80%.
How did you add value to the deal?
Improved curb appeal by adding new landscaping, siding and general clean-up of exterior. Cleaned up laundry facilities in the basement. Renovated 10 of the apartments with modern fixtures and finishes to attract great tenants.
What was the outcome?
Most of the new residents I have put into this property have renewed their leases for another year. And the resident across the street couldn't be happier with how her neighborhood looks. The seller even drives by the property on occasion and tells me how thankful she is that we're taking good care of it - - it means a lot for her personally and for her father's legacy.