Client Success Story! 4 Unit Investment in Washington DC

[Cassidy Burns]

Hi BP,

I wanted to share one of my clients investment property success stories.  Take a look! 

4 Unit Property in Shaw Subdivision Washington, DC off of 10th and Rhode Island (great location)

-Purchase Price: $1,965,000 w/ $30,000 Seller Credit

-Appraised Value: $1,975,000

-$40,000 in initial equity on the purchase 

25% Down Payment from 1031 Exchange of Single Family House he bought in Pittsburg, PA 5 years ago.  Purchase for $350,000 , Sold for $850,000.  Rolled $450,000 profits into this building.  Had to come $50,000 out of pocket to complete purchase.

4 Units:

-4- 2 bed/ 1 bath Units

-4 Parking Spaces w/ Roll Up Garage

-Patios off of each unit 

-Projected Rents : $3,299 / lower levels  $3,650/ upper levels

-Currently has 1 tenant rented for $3,700 , 3 other units vacant.

Closed July 8th.  First mortgage payment not until September 1st.

-Corporate  Housing company reached out to me when they saw that I had it under contract and came out for an inspection .  They made us an offer: 

-$11,200 / monthly guaranteed rent for 23 months

-1st Month Free for all units

-Will take over the entire building

-Furnish the entire building

-Manage the entire building 

-Pays all utilities! 

-Will take over the building July 9th......0% vacancy for the first 2 years

Not as high monthly rent as we had initially projected/ could have got, but the lack of work, the passiveness of the investment, and the added peace of mind knowing that the building will be taken care of made it a no brainier for my client.  

His monthly payment is $8,900/ month

Postive Cash Flow : $2,300/ month which he is using to expedite the pay down of the loan as this is going to be his retirement in 15 years.  

Beautiful Deal in a great neighborhood in Washington DC.  I project this building will be worth $2.2-$2.3 million in 10 years.  

On to the next! 

[Russell Brazil]

@Michael Randle Believe it or not, it would actually be possible to have close to 0% vacancy in much of DC.  I have a client one client who has primly located properties in DC that has a less than 1% vacancy rate over a an 18 year period.  In the DC suburbs where there is less demand than in the city I average a 2% vacancy rate, and I could cut that down if I marketed the property earlier when I know I have tenants leaving, but I get too busy selling properties that I dont optimally run my rental portfolio.