Updated 3 months ago on . Most recent reply
4 - Unit Multifamily Off-Market
Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $205,000
Cash invested: $47,000
4-unit building - three two bedroom one bathroom apartments and one one bedroom apartment. Small parking lot with 8 parking spaces. Old building (1880's) with deferred maintenance.
What made you interested in investing in this type of deal?
Controlling this four unit building because we've got the house right behind it definitely had value to us. We also were able to get a great deal on it and have high cashflow.
How did you find this deal and how did you negotiate it?
We own the house behind the building so I knew the investor that owned this property personally through Facebook. He messaged me one day and mentioned that he was going to be selling and wanted to give me an opportunity to purchase it first. I did a quick exterior walk that day and then arranged to get in the units the following week. We knew the condition was bad & he mentioned that he needed to get rid of it quickly for another investment opportunity. Easy negotiation with little back & forth
How did you finance this deal?
I have a 80% LTV loan with a small local bank.
How did you add value to the deal?
We have put very little into this unit. Took care of some repairs needed and leased up a unit that had been vacated (left without notice and behind on rent during the sale - seller didn't even know)
What was the outcome?
We originally planned to just hold this for a year and then sell for a gain and 1031 into something nicer. But the cashflow is great so we're actually going to hold a little longer.
Lessons learned? Challenges?
Definitely different managing a 4 unit building than SFR. Had some issues between tenants that had to be managed. Snow removal is also much more expensive than I would have thought.