Condo flip but tenant wouldn’t leave

[Jonathan Bombaci]

Investment Info:

Condo buy & hold investment in Framingham.

Purchase price: $117,000
Cash invested: $25,000

Purchased a investment condo with a tenant in place at a great prices since they were paying way below market value. We had the intention of flipping the condo but the rent moratorium made us nervous for forcing the tenant out so we presented a new lease with a massive price increase, still below market value but would make the unit cashflow about $400 per month. We were hoping they'd move out on their own but instead they just pay the rent on time each month and never call for us for anything. We normally don't buy investment condos since the cash on cash return is normally low due to the HOA fees but there is something to be said about not needing to worry about the exterior, heat, hot water, snow removal, or landscaping. It's definitely been a passive investment so far.

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

Purchased condo worth at least $200,000 for $117,000 because the tenant was paying less than $1000 a month in rent

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

MLS

How did you finance this deal?

Commercial financing since purchased with tenant in place and in a LLC

How did you add value to the deal?

Increased rent quite a bit. We were trying to force the tenant out, but they stayed.

What was the outcome?

We have a very passive cash flowing unit added to the portfolio.

Lessons learned? Challenges?

Sometimes things don’t go to plan so always have a back up plan. In this case it’s no longer a fix and flip instead we’re holding for cashflow for at least another year and then we’ll reassess if / when the tenant moves out.

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

Yes my team of investor focused agents, Candor Realty, in MA and NH, Jeanne D’ARC credit union, and attorney Doug Mercurio in North Reading