Investment Info:

Small multi-family (2-4 units) other investment in Wappingers Falls.

Purchase price: $330,000
Cash invested: $85,000

In contract to purchase a 4 family for 330K with a 10K seller concession that has 3 2/1 units rented at 1300 a month and 1 1/1 that needs to be gutted. There are exterior repairs needed. I need about $25,000 in repairs. ARV= $425,000. Trying to BRRR strategy with a bank. 75% LTV on the 1st mortg then after I make the repairs and reappraise the property they guaranteed me 80% CLTV on the 2nd mortg. I will be able to pull out 90,000 from the 2nd mortgage. total rents $5,100 potential to $5,500

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

I feel that BRRR is the fastest way to grow net worth and achieve FI. In my area (NYC region) overhead costs are very high and you need a minimum of 4 units to get the numbers to work.

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

I found it through MLS. Initially, I did not pay much attention to the property. The listing did not represent the property potential. The listing was asking 385K. I made an offer of 330K before seeing the property. We settled on 340K. We got in to see the place and I saw the repairs would take about $35,000 if I hired a contractor. SO I had a home inspection done and estimates from a licensed GC. I then made a new offer of 320K and disclosed the repairs. They agreed and we are now in contract.

How did you finance this deal?

So far bank financed with the Down Payment being from my primary residence HELOC.

How did you add value to the deal?

Gut the 1 bed/1bath and make the necessary repairs and increase curb appeal

What was the outcome?

we will see.

Lessons learned? Challenges?

getting bank financing with a property that has some safety repairs needed is not easy....