All Forum Posts by: Eric Sullivan

Investment Info:

Small multi-family (2-4 units) fix & flip investment in Salem.

Purchase price: $510,000
Cash invested: $330,000
Sale price: $1,150,000

This 2 unit property is located in one of the most desirable neighborhoods in Salem. Located across from the school, 3 houses down from the water, and a couple of minutes walk to the train. The property is perfectly situated for city buyers who can commute quickly to Boston. Our plan is to turn this into 2 luxury condos with off-street parking. The first floor will be a 3 bedroom 2 full bathroom layout with an open kitchen and living. The second floor will be a townhouse style unit consisting of 5 bedrooms and 3 full bathrooms. We also look to add a roof deck and capture around 300 sqft of new living space by finishing a three-season porch on the first and second floors.

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

We like condo conversion projects in the Salem area.

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

This was an on-market deal posted to MLS.

How did you finance this deal?

Bank financing, 25% down and 100% of construction.

How did you add value to the deal?

Added 300+/- sqft and we are gut-renovating the entire house.

What was the outcome?

In progress

Like in any business, strong relationships are critical. While there is a low barrier to become an agent, I tend to find there are agents out there who really perform. But you are most likely not alone in the idea that you are calling around looking for deals. These agents likely have relationships with other investors that they are going to call first, over someone they have never met and have had one phone call with. It took several years to build the right relationships with the right agents to be on the top of their list. As well I focus on one town as well. There is opportunity everywhere depending on your criteria, but if you identify a location that meets all your strategic goals, then I bet you can build a really strong business right there. The key here is this takes time, effort in relationship building, and won't happen over calling a lot of random agents and expecting instant gratification.

@Damian Bialonczyk obviously I would like to obtain the highest COC possible and I tend to be more patient in looking for a higher return overall. Which is our same mentality for condo projects. Our floor is 20% but we are usually hitting in the 22-30% ROI.

@Jose Brandao if you still have not identified someone, let me know and I can make an introduction for you.

While I am not in the metro west and I am on the north shore. We are still seeing a lot of property come on the market, both smaller multis and single-family. They are still going under agreement pretty quickly. My assumption is that people are operating under the premise that by the time they finish renovations the virus may be winding down and if they can time it right, they could hit the market on the upswing. I would guess, that it's not all that different in metro west. There are probably active investors out there.

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $1,250,000
Cash invested: $115,000

6 unit buy & hold in Salem Ma. Large value add opportunity with a lot of upside. We invested 115k in renovations to bring rents up to market rate (30-40% per unit)

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

Outside of our condo conversion projects, we are actively looking for value add multi-family properties. The numbers were strong with a COC just shy of 25%.

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

Our agent notified us. We ran our numbers and lead with our offer of 1.25m. They countered 3 times but we didn't budge and were able to close.

How did you finance this deal?

20% down with a local bank and a small construction loan for 115k @ 4.1% i/o, 12-month term.

How did you add value to the deal?

Ability to raise rents 30-40% per unit. As well as cosmetic updates.

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $1,250,000
Cash invested: $115,000

Harbor st was a great opportunity because of the value add that we saw. Rents were 30-40% below what they should be and while we could just raise the rents as is, with cosmetic updates it allowed us to gain even further value and maximize profits. The property also has been owned by a previous investment group who had updated all heating systems just a few weeks before listing it. The bones and mechanicals of the property were all in great condition. This made sure we did not have any major capital projects right from the start. The property consists of 6 units in total, with 10 parking spots.

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

Outside of our condo conversion projects, we are actively looking for value add multi-family properties. The numbers were strong with a COC just shy of 25%.

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

Our agent notified us. We ran our numbers and lead with our offer of 1.25m. They countered 3 times but we didn't budge and were able to close.

How did you finance this deal?

20% down with a local bank and a small construction loan for 115k @ 4.1% i/o, 12-month term.

How did you add value to the deal?

Ability to raise rents 30-40% per unit. As well as cosmetic updates.

Investment Info:

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

Purchase price: $600,000
Cash invested: $150,000

Purchased a 3 family off-market that I plan to use as a short term rental. I have gutted about 75% of the house and am redoing all of the plumbing, electrical, HVAC, and roof.

Unit 1 was a full

Unit 2, full gut except for the living and dining room I moved the kitchen and am adding a second full bathroom and created a master suite.

Unit 3, new kitchen and doubled the size of the bathroom.

**Renovations are currently in process

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

Most of my investments are in the area, and currently I live in a condo on the same street. Per the short term rental laws in Salem if you live in the building you can airbnb the other units. So I plan to live in unit 1 and airbnb the other 2. I operate another airbnb a few streets over so I have real data to go off of for numbers. I expect to have all of my living expenses covered and then cash flow about 85k-100k on top.

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

Brought to me by an agent who works exclusively in the area.

How did you finance this deal?

20% down from a bank I have worked with several times. I am funding renovations myself, no construction loan.

How did you add value to the deal?

Gutting a majority of the house and the finishes will be in line with luxury condos in the area.

What was the outcome?

Still in process.

Lessons learned? Challenges?

People used to pour 4" of concrete in the bathrooms to tile which required us to jack hammer the floors. The weight along with notches in the joists required me to redo every bathroom floor from joists to subfloor.

Investment Info:

Small multi-family (2-4 units) fix & flip investment.

Purchase price: $527,500
Cash invested: $350,000
Sale price: $1,289,000

Purchased a legal 2 family. We had it converted to a legal 3 by using our attorney and going to the building inspector. The property met the requirements to be grandfathered in pre 1965 when the zoning was put in place. This gave us a large amount of upside when it came to the ROI for taking some risk. The numbers still worked as a 2, but are a grand slam as a 3 unit.

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

Off market, agents were involved.

How did you finance this deal?

Conventional 25% down + 100% of construction costs from the bank.

The last few years I have done several deals, from condo conversions, launching airbnb's, and long term rentals. I also built my network where I have some off-market deals flowing my way. I have 4 on the hook right now with a 3 family condo conversion currently in process as well as about to put an offer in on another 3 family to condo. I don't have enough capital to handle the 4 25% down payments + carry to make all these deals happen. In hindsight this is my fault for not building out my network of capital, but I was only planning on doing real estate as a side thing, but it has started to really take off. How in the past have some of you built that network of capital to afford multiple down payments? I can get the financing from a bank all day but where I live a typical 3 fam costs about 130-150k for down payments on each.