Duplex Value Add + 10% Cash on Cash

[Hayden Bowles]

Investment Info:

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

Purchase price: $375,000
Cash invested: $105,000

My first "multi-family". A duplex. Value add deal, as one unit was trashed and not livable. Goal was to renovate, add value and hit 10% Cash on Cash.

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

Great learning experience, that was number one. I was also extremely confident in the rental area and knew what I could get. There was a lot of learning points here. 1 unit trashed, the other with a month to month tenant. So lots of angles to learn from. Renovations, raising rents, dealing with 2 units... was super fun!

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

My agent brought it to me, was a fresh to market deal and he knew the other agent. Had to actually work in a basic deal for the seller to spend $2,500 to make the other unit livable so I could get the financing. $375k closing costs and got most of my closing costs covered

How did you finance this deal?

20% down, 30 year fixed. Currently 3.3%, mortgage is $1,516

How did you add value to the deal?

Renovations on both sides. Rents bumped from $1,200/side to $1,500/side a month and 1 year leases in place. Gross rents of $3,000/m

What was the outcome?

I don't plan on selling, so outcome is just cash flow. Although I did refinance when things hit the fan and rates dropped. Extra cashflow from that. Property is worth $475,000 , so I could have pulled out roughly my originally $100k and had a BRRRR property. I chose not to pull out the cash. Just letting this one sit for now and bringing in strong cashflow

Lessons learned? Challenges?

Have to stay on top of renovation crews. 2 weeks turns into 2 months real fast for a renovation