917 Ellrose Ave
5 Units Off Market Deal
So many of you know since 2011 I’ve been laser focused on investing in one particular area of a large city of over 500,000 people. It took time to zero-in on a specific area of such a large city, an area which I am now very comfortable investing in and really understand the overall social and economic landscape.
This is very important for new investors to grasp. When considering investing somewhere, one must really get to know the area. as many places things change street to street.
With that all said, this particular market has been increasing rapidly in value over the last few years, prices of properties have escalading significantly, making finding solid cashflow very difficult.
Realizing this months back, I began researching other markets and after considerable time I located one several hours away from my current market. This particular city is smaller in area and with a population of approximately 250,000. Being several hours away from the country’s biggest Metropolitan city, property prices are significantly less making them more attractive to me!
Living out of the country does pose some challenges for me, however not enough from preventing me from take action.
I started calling agents and property managers across the city and had dozens of conversations over the phone to better understand what was going on in this market.
I reviewed hundreds of properties, looking at sold prices, available properties, ran the numbers, and began to really zero in on areas and types of properties.
I started building a relation with a particular agent who was also a property manager. He understood what I was looking for and after several conversations presented a potential opportunity.
His company was managing a 5-unit property for a client which may be interested in selling it “off-market”.
That’s what I was looking for; not having to compete with other investors on the open market where prices quickly escalade. So we worked through some numbers, put an offer together and he presented it to his client.
We were able to agree on a price, with the only condition being one tenant had to be evicted. They were already in the process of eviction. It did take several months to finally have the tenant removed and close on the deal, but in the end it all worked out.
Due to confidentially reasons with my partner, I cannot disclose all the details of this transaction. I can simply share that cost per unit was around $60,000/unit and most rents in the $500-700 range, with one unit rented at $1000/month.
Hope this last post was interesting and remind you to push through adversities and challenges.
I live in Southern California and continue to invest out of State, if I can help you in any way please reach out.
Until next time, take care!