Cincinnati OH (Norwood) Duplex BRRRR (minus the rehab ;) )
Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $167,000
Cash invested: $16,700
Norwood Turnkey Duplex
What made you interested in investing in this type of deal?
I already owned other properties in norwood and knew this would be a great longterm rental.
How did you find this deal and how did you negotiate it?
Wholesaler brought this deal to me.
How did you finance this deal?
I was in the middle of 3 flips when this deal was brought to me and had no cash of my own available to purchase it. I knew it was way undervalued so had to put it under contract.
I got a loan from my HML for $150,300 and then got a private lender to fund the other $16,700
How did you add value to the deal?
I raised the rents but other than that this property was in perfect shape. The old landlord just had so much going on professionally and this was his only rental property so any time there was a call or issue he lost his mind and needed to offload it.
What was the outcome?
This property appraised for $235k after 6 months with no rehab done to it whatsoever. I did a rate&term refinance to put the $150,300 note on a 30-year fixed 4.5% mortgage and paid off the private lender with cash. Since it is a 2-family i wasnt going to get much cash from a cash-out refinance since conventional can only do 70% on multi's so i took the better interest rate and went with a rate&term.
Lessons learned? Challenges?
I wish i would have recorded the private loan as a 2nd lien on the property. This would have allowed me to do a rate&term refinance of this loan along with the 1st lien at a 75% LTV ($176k which would have more than paid off both loans). This forced me to keep about $20k in this deal but to have $20k cash left in a deal that has $85k equity (probably more like $100k now) is not the end of the world.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Bethany Ritchey with Fairway Mortgage does all of my conventional lending.
MMLending based in Louisville KY does all of my Hard Money Loans.