FourPlex Renovate Rent Hold and Exchange

[Lynne Hart]

Investment Info:

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

Purchase price: $90,000
Cash invested: $50,000
Sale price: $289,000

4 family building purchased in distress in Mount Pleasant neighborhood, previously owner occupied for quite some time, the owner could no longer care for it. We prettied her up, gave her a new sewer, new roof, new garage roof, cleared out a ton of junk, and put this into production in 2020. Al 2 bed 2 bath units with updated open kitchens and modern baths, some with deep tubs! A 3 car garage in the back is just waiting for us to add electric doors and rent it out.

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

It was a working building for $90k that just needed some cosmetic updating. 2 bedroom units and a 3 car garage.

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

It was on the MLS for a while and the price was too high, negotiated quite a bit and then found a sewer issue and negotiated some more!

How did you finance this deal?

Conventional loan and renovated in cash.

How did you add value to the deal?

New kitchens, some new baths, flooring, a new roof and a new sewer.

What was the outcome?

Rented at top of the market and was able to sell after 5 years of generating 30k annually, at a rougly 125k profit above what was spent to purchase and renovate.

Lessons learned? Challenges?

The area was a little rough and tenants were hard on the units. Having the rent higher might have gotten better tenants.

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

Yes and I'd be happy to share them if we end up doing a deal together.