From Duplex to 5-Unit Cash Flow Machine in Vallejo, $5K/Month Net

[Daniel Gutierrez]

Investment Info:

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

Purchase price: $375,000
Cash invested: $300,000

Acquired for $375K in Vallejo, CA. Converted a distressed duplex into a 5-unit multifamily, all built to California code. Scope included full demo, new electrical (PG&E panel), plumbing (6 baths), new roof, 5 kitchens, insulation, windows, and finishes. Now cash flowing $5K/month. A key piece in my 60-month goal to control 100 doors through value-add and creative finance.

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

I was looking for a property with strong value-add potential where I could leverage my construction background. This duplex had the layout and lot configuration that allowed for conversion to multiple units, which aligned perfectly with my long-term cash flow goals.

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

I found this off-market opportunity through a local connection. The property was inherited by six siblings, five were ready to sell, but one was initially resistant. It took 12 months of patient and consistent follow-up to build trust, navigate family dynamics, and ultimately align all parties. Rather than rushing, I positioned myself as the steady and solution-focused buyer. That persistence paid off, and we secured the deal at a favorable price once everyone was on board.

How did you finance this deal?

I used a mix of private capital and personal funds to finance the acquisition and rehab. I structured the investment with minimal leverage to maximize cash flow and long-term equity.

How did you add value to the deal?

We fully converted the property from a 2-unit to a 5-unit layout, built to California code. Improvements included full electrical and plumbing upgrades, a new roof, new kitchens and bathrooms, soundproof insulation, and modern finishes throughout. The transformation turned a distressed asset into a high-performing, cash-flowing property.

What was the outcome?

The property now generates $5,000/month in net cash flow and added significant equity. It’s a cornerstone in my 60-month goal of acquiring and operating 100 units through creative and strategic investing.

Lessons learned? Challenges?

Coordinating trades while converting a building without going through the city’s permitting process taught me to double down on quality control and inspections. It was a reminder that doing things to code, even without permits, still requires high standards and responsibility. It also reinforced the power of having a clear vision and end-use plan before demo day.

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

Yes, I worked with a seasoned real estate agent who brought years of experience to the table. While we had a minor discrepancy during the process, specifically regarding the property line not being clearly disclosed, I ultimately learned a great deal from working with him. His negotiation skills and local market knowledge were valuable, and despite the hiccup, the deal worked out well. It was a reminder that even experienced professionals can miss details, so double-checking due diligence is a