Updated over 2 years ago on . Most recent reply
Having Alternative Exit Strategies!
Investment Info:
Small multi-family (2-4 units) fix & flip investment in Milwaukee, WI.
Purchase price: $63,000
Cash invested: $29,400
Sale price: $129,990
Originally destined to be a BRRR property, or a long term hold. We had excellent cash flow in the property at roughly $650 a month fully occupied, however I had all of my renovation costs tied into the project and couldn't access the equity, doubled with the fact the neighborhood wasn't the best and I didn't see much of a future for appreciation, we choose an alternative exit strategy and decided to flip the property.
What made you interested in investing in this type of deal?
The property made sense; but the Wholesaler was from out of the country, I don't think anyone particularly wanted to work with that wholesaler because of this reason. Where others were apprehensive, I saw opportunity.
How did you find this deal and how did you negotiate it?
Facebook marketplace, negotiated via messenger.
How did you finance this deal?
Commercial Loan; 20% down and 25 day closing
How did you add value to the deal?
I had two separate contractor crews, one cleaned up the basement, pressure washed and painted the basement, along with painting the stairs and common area hallways.
The other crew removed a old smoking balcony from the rear of the property, did some siding repair and painted the entire house. They did the same to the detached garage and also rebuilt the front steps.
What was the outcome?
On market currently for $129,900! We'll see how it goes, worse case, I can keep the asset until its more favorable to cash out refi, all while enjoying high monthly cashflow.
Lessons learned? Challenges?
Lessons learned; SO many. KNOW YOUR NEIGHBORHOODS. Three blocks over and this property would've been worth upwards to 150K. The neighborhood was rough, very rough. But there's a huge need for housing and we're meeting the demand. The whole reason I choose to exit the property all together was the regret of purchasing an asset in a C-, D+ area.
Spent a lot of money on the basement, which came out amazing but not sure how much actual value that added to the house.