4 Plex Renovation for Buy and Flip
Investment Info:
Small multi-family (2-4 units) buy & hold investment in Louisville .
Purchase price: $100,000
Cash invested: $20,000
Sale price: $200,000
We purchased 2 4 plexes by owner financing. We put 20% down and made monthly payments of $1000 to the owner. Each unit was rented for $500 a month with a 14% Cap Rate. We took the income from rent and used it to improve the units. We put new carpet , flooring, paint, and updated fixtures. We then sold the units for $200,000.
What made you interested in investing in this type of deal?
Using owner financing made it possible to satisfy the owners needs for rental income and keep cash flow for us as well.
How did you find this deal and how did you negotiate it?
Investor from Bigger Pockets was looking to sell. I negotiated it as Realtor, between my buyer and the seller.
How did you finance this deal?
Owner Financing
How did you add value to the deal?
Added improvements brought value up by $50,000 per building.
What was the outcome?
Sold to investor as income generating property.
Lessons learned? Challenges?
Owner Financing is a great way to leverage your money. Managing 8 units while renovating vacant units and moving tenants around was found to be a challenge.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I represented both the buyer and the seller of the transaction.