Previous success proved partnerships can provide $$$$

[Mike DeWitt]

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $120,000
Cash invested: $85,000

First Partnership provided plenty of lessons and plenty of upside!

What made you interested in investing in this type of deal?

We had some ambitious goals to acquire 5 deals in 2021. We knew to scale, we had to figure out how to partner and how to use OPM to generate mutually beneficial returns

How did you find this deal and how did you negotiate it?

This deal was found via a wholesaler

How did you finance this deal?

We used our cash from previous deals to fund the acquisition and partnered with a high school buddy to fund the rehab

How did you add value to the deal?

We budgeted 55,000 to add one bedroom and bathroom per side. We were SURE this would provide the value we needed to BRRRR our money out.

What was the outcome?

After plenty of headaches, lessons and sleepless nights, we provided 25% ROI for ourselves and our partner on our first partnership!

Lessons learned? Challenges?

Little comparable multi families had our first appraisal significantly undervalue the property. We underestimated the rehab by 90%. We thought for sure our friendship, partnership, and future in RE was in jeopardy. Luckily, my friend is as patient as he is ambitious, so we tried another lender/appraiser and got the place valued at $255,000. Although we did not successfully pull out 100% of our contributions, we were able to only leave 10% in the deal and provide great ROI for our partners