5 unit in Gardner MA Buy & Hold

[Jonathan Bombaci]

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $365,000
Cash invested: $75,000

Purchased this 5 unit off of a wholesaler for $365,000 the exterior was very rough (see attached) but the interior was in good shape. Units were very far below market rent but 1 unit was vacant and another one moved out when we did rent increases. When we bought the property gross monthly rents were $3400 a month less than 1 year later, with 2 unit turns and rent increases on the 3 remaining inherited residents we have them up to $5400 a month and market rent would be about $6500 a month.

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

Great price in a market we were growing a portfolio in already.

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

Found it from a wholesaler. They originally wanted $400,000 for it but got the price down to $365,000

How did you finance this deal?

Hard money for the renovations and needed to close quick then refinanced it to a local credit union. Total renovations cost about $95,000 and it appraised a $550,000. Wasn't enough for a BRRRR but still have great equity in it and strong cashflow.

How did you add value to the deal?

New siding was the big thing. We also removed trees, fixed the parking, renovated one unit, turned another one, and increased rents across the board.

What was the outcome?

Another 5 units added to our buy and hold portfolio in Gardner MA.

Lessons learned? Challenges?

Renovations were planned at $65,000 but the cost of siding skyrocketed due to supply chain issues. We blew our construction budget by about $30k but luckily we purchased it right.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes we have a full service real estate team with 35 investor focused agents at Candor Realty and an in-house management company called Simplified Management.