Great Deal Alert
On occasion we find a property with the right combination of tenants who are low rent, but not too low, and a price point where you can purchase the property, negotiate with the tenants, renovate and end up with an asset that cash flows beautifully. I have not one, but two (!) such properties right here, right now—both in Boyle Heights.
The first one is a triplex for $500K. The tenants are paying below market, but not so far below that you couldn’t negotiate them out for a reasonable price. The way I look at this property, you spend approximately $150K between buyouts and renovations and end up with $5000/mo in gross rents. After you re-finance the property, you end up with a cash-on-cash return of about 11%.
The other one is a 4-plex for $850K. Again, tenants are paying an amount that is high enough that you can negotiate them out without spending too much money. Between the buyout and the renovations, you are “all in” at approximately $250K which means a total of $1.1 million between purchase and re-positioning. But, at the end of that, you’ll have about $9400 in gross rents. This will mean a cash-on-cash return of an incredible 15%!
Buy them both together and really expand your portfolio with two great properties in one of the most upside neighborhoods in California. Call me for more information.