Earlier this year, I helped a young investor make the jump from buying two-families to purchasing his first three-unit building. While that may not sound like an impressive feat, if you’ve spent time touring these types of properties you quickly notice the stark difference in caliber and quality as you move up in size.
Generally speaking, two-unit buildings tend to be better maintained. They are typically smaller in terms of square footage and therefore easier and more affordable to manage. Plus, it’s not uncommon for the owner to live on premises making it more convenient to keep up with the work. It’s not too difficult to find a two-family with pride in ownership. On the other hand, three family homes are often pure investment properties. With the owner not living on-site, things can quickly fall to the wayside. With maintenance being out of sight and out of mind, there tends to be more significant deferred maintenance and issues with the larger buildings available for purchase.
This couldn’t be truer for my recent transaction at 33 Oakland St in Salem, MA. The property is a large, mint colored three-family, which, for obvious reasons, I adoringly dubbed, “The Green Monster”.
The house had a ton of potential, but had been run into the ground over the years. It needed a buyer who could see beyond the dirty kitchens and baths, and have a vision that could highlight the beautiful floors, high ceilings, and expansive floors plans. If you’re looking to buy a multi-family in the Boston, you need to be open to putting in some work. If you’re not sure how to approach this type of project, never fear, that’s where I come in!
33 Oakland St required a serious round of due diligence – from the home inspection to the pinned land survey and walkthroughs with half a dozen contractors. After several back and forth rounds of negotiations, The Green Monster was finally under agreement for near $85k under the original list price.
Working with my client, we came up with a plan to stabilize and reposition the property to attract quality tenants. I helped him to analyze the updates that would provide the best return on his investment, budget for the renovations, and hire contractors to preform the work.
I could not be prouder of my client’s hard work in completing the transformation. I’m happy to report that the house is now 100% occupied with rent values surpassing our expectations.
Take a look at these before and afters!