I Made My Largest Single Profit to Date

[Brendan Winans]

I Made My Largest Single Profit to Date: $250K in 12 Months on a Fourplex

Earlier this year, I closed out a value-add fourplex that generated a $250K profit in just over 12 months. I bought it for $400K and sold it for $660K after strategic turnovers and rent increases.

I have another fourplex deal in the works right now. Different situation, different challenges, but bought with the same principles.

Let me break down what made this deal work and what I'm applying to the next one.

The Deal Structure

The seller came to me with a tired fourplex. The property needed work. Tenants were paying below market rents.

I paid $400K. Quick close, minimal contingencies. The seller got certainty and speed. I got a property with clear upside potential.

Over the next 12 months, I executed a systematic value-add strategy. As units turned over, I did quality renovations. Nothing fancy, but proper updates that justified higher rents. New flooring, fresh paint, updated fixtures, addressing deferred maintenance.

I raised rents strategically as leases renewed or units turned. Each renovation brought rents from below market to at or slightly above market rates.

Twelve months later, I sold for $660K. Clean exit, strong profit, onto the next deal.

Where The Profit Really Came From

Here's what's important to understand about this deal.

The renovations and rent increases added real value. Probably $60K to $80K based on the improved cash flow and condition.

But that means roughly $170K to $190K of the profit came from something else... buying the property right in the first place.

This is the part most investors miss when they analyze deals. They focus on the value-add component because that's the sexy part of the story. The transformations, the before and after photos, the rent increases.

But the real money was made the day I bought it.

The Anchor Problem

When this seller came to me, they had a number in mind for what they wanted. Most investors would have anchored their entire analysis to that number.

Here's what happens when you anchor to a seller's price, your brain subconsciously solves for ways to make their number work. You start finding reasons why the property is worth more. Why you can add more value than you probably can. Why the comps support a higher price. Why you can push rents further than is realistic.

This is called kiting, or high anchoring. And it's how investors talk themselves into mediocre deals.

I ignored their initial number. Not disrespectfully, but I did my own analysis based on actual condition, actual rents, actual market data. I determined what I could pay and still hit my profit targets.

That discipline at the acquisition stage is what created the $250K profit, not my renovation skills.

The Next One

I bought another fourplex about a year ago using the same approach. Different circumstances entirely. This property had been damaged in a fire, then another tenant's unit caught fire a few months later.

Right now I'm working through extensive rehabs. This isn't cosmetic turnover work. This is serious reconstruction.

But I bought it the same way I bought the last one. Deep enough that the profit is locked in at acquisition. Everything after that is just execution.

The work is harder. The timeline is a bit longer. The challenges are different. But the principle is the same.

Why This Matters

After nearly 20 years and hundreds of deals, I can tell you the most valuable skill in real estate investing isn't renovation expertise or property management or financing relationships.

Those things matter, but they're multipliers on the foundation.

The foundation is buying right. Making offers based on what the property is worth to you, not what the seller hopes to get. Staying anchored to your analysis instead of drifting toward their expectations.

Most investors spend all their energy analyzing ways to make a seller's number work. Successful investors spend their energy determining what they can actually pay and having the discipline to stick to it.

That's the difference between decent returns and exceptional profits.

The Bottom Line

My $250K profit came from a combination of solid execution and buying deep. But if I'm being honest about which mattered more, it was the acquisition.

Good execution on a bad purchase price just makes you competent at losing money efficiently. Good execution on a great purchase price creates life-changing profits.

The fourplex deal worked because I bought it right. The next one will work for the same reason, even though the path to get there looks completely different.

Everything else is just details.

What's your biggest challenge in staying disciplined on purchase price when a seller has anchored a higher number in your mind?