Successful Repositioning of Triplex in Virginia-Highland

[Will Rawlings]

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Atlanta.

Purchase price: $649,000
Cash invested: $30,000

Successful repositioning of Virginia-Highland triplex. This triplex was a class B property, old and outdated, at the time of acquisition. We updated all units, and added one more bed and bath to achieve highest rent value, successfully converting this asset into a class A triplex producing an 8% annual cash-on-cash return and a 42% total annual return.

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

I knew this deal would bolster high demand and high rent value due to its class A positioning. This triplex had great opportunity for cosmetic upgrades and the addition of an extra room and bathroom. The combination of cash flow and strong future appreciation made this a perfect fit for a buy and hold strategy.

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

This deal was acquired through one of our off-market suppliers. We negotiated an additional $5k seller credit at closing.

How did you finance this deal?

This deal was funded with a 70% LTV senior loan @ 2.174%. Equity was funded by majority investor capital and some personal capital.

How did you add value to the deal?

We made the market-demanded cosmetic upgrades (including landscaping), and added one more bed and bath in one of the units to boost rent value significantly.

What was the outcome?

Thus far, this asset is on track to produce an 8% cash-on-cash return and a 42% total return in the first year.

Lessons learned? Challenges?

All investments come with new challenges that offer the opportunity to add value. This deal demanded we think out of the box by adding an additional room and bathroom.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Keith Biggs, Realtor
Elizabeth Rawlings, Campbell & Brannon (Real Estate Attorney)
Jeff Raw, Black Dawg Construction