VTB purchase of a 7plex

[Owen Lennox]

Investment Info:

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

Purchase price: $1,225,000
Cash invested: $30,000

Purchased a 7 unit multi-family property using a $350,000 VTB. This property was only registered as a legal 6 plex. I converted the 7th unit into a legal unit and have since turned 4 of the 7 units over and renovated the units and increased rent.

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

There was large upside to the property with potential to turn the units over and generate higher rent. Also the VTB made it easier to get into the deal with only $30,000 out of my pocket on closing.

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

I found the deal from a expired listing that was getting passed over.

How did you finance this deal?

I negotiated a VTB with the seller for $350,000 at 5% interest only and the remaining was financed through private funds.

How did you add value to the deal?

Legalize the 7th unit and turned over 4 of the 7 units.

What was the outcome?

We have turned the property from being a cashflow negative property to positive cashflow and increased the building value.

Lessons learned? Challenges?

Getting tenants out of a building and renovating it is not an easy or straightforward process. So have a plan and keep pushing through as issues will come up.

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

I was the realtor and worked with the seller and other private lenders for financing.