Updated 2 months ago on .
Smaller market goo cash flow
Investment Info:
Small multi-family (2-4 units) buy & hold investment in Hawthorne.
Purchase price: $135,000
Cash invested: $27,000
Purchased .3 acre lot with a 3/1 and 1/1 duplex. Light renovation. zoned for 2 more doors. Cash out refi after renovation appraisal of $220k. Next step build another duplex on property.
What made you interested in investing in this type of deal?
The opportunity with the zoning to build an additional duplex or 2 smaller homes and the potential of higher cash flow vs cost to obtain.
How did you find this deal and how did you negotiate it?
As a license agent, found through MLS. After discussing with owner, he revealed he was selling because of a divorce. He wanted 189k for this and adjacent property. After a couple meetings knowing his situation I offered $135 and accepted.
How did you finance this deal?
DSCR with 20% down
How did you add value to the deal?
light renovation, floors, paint and refinish kitchen cabinets along with some foundation work and new 2 story outside stair
What was the outcome?
appraised for $220k and cash out refi of $46k with $2300 rental income and $600 true cash flow
Lessons learned? Challenges?
Finding contractors in smaller markets was a challenge, particularly one with same quality and standards I wanted.
