Failed 2 family flip in Leominster MA

[Jonathan Bombaci]

Investment Info:

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

Purchase price: $209,000
Cash invested: $42,000

We Purchased 2 family property as part of a commercial portfolio. The goal was to fix and flip it. We had it on mls at $275k but it didn’t sell right away. Both tenants are long term tenants and feedback was it was “too commercial looking” for the traditional Househacker. Given the strong cashflow we decided to keep it for our portfolio instead of reducing the price.

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

It was a large commercial portfolio deal in a market that we knew very well. This 2 family was 1 of 8 multi-families purchased in that portfolio

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

Off the dreaded MLS

How did you finance this deal?

Commercial financial with Jeanne D’ARC credit union

How did you add value to the deal?

Increased rents and separated it from the other multi-families in the portfolio

What was the outcome?

Failed flip but still a decent little 2 family to have in the portfolio. It crushes the 1% rule which is hard to do with 2 family properties in ma

Lessons learned? Challenges?

Avoid trying to flip 2-families that that look too much like commercial real estate. It turns off househackers which is a big portion of the buyer pool

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

Yes my team Candor Realty with 25+ investor focused agents in MA and NH. Jeanne D’ARC CU in Lowell and attorney Doug Mercurio in North Reading