JUST SOLD! Brick Triplex Investment
Published On: December 15, 2015 Posted by: Jeremy Peterson
I just closed on the sale of this brick triplex property in Ogden. While the building looks like a house, it was originally constructed as 3 units with a single bed unit upstairs, a 2 bed unit on the main level, and a spacious 1 bedroom basement unit below. The building generates $1,800 in rents with the owner paying for water and joint gas utilities. This property boasts an ROI of around 13% annually.
We originally listed the property for sale in October 2014 for $164,900. The property sat on the market for a month with a few less serious inquiries. After 30 days we reduced the price to $159,900. Later, we again reduced the price to $152,700. By May 2015 it became apparent that the property was not in satisfactory condition to sell at its the list price.
Meanwhile, our brokerage assumed management responsibilities for the property. We began to reinvest in the property to improve its rent rolls and income performance. One of the main challenges we faced was a vacant basement unit. We installed tile floors and a tile surround in the bathroom. We also had the tile around the fireplace mantle replaced and new light fixtures installed.
Curb appeal was also an issue with this property. We ordered the concrete stairs repaired and painted. We also replaced rotted lattice and hauled off several trailer loads of tree debris from the back yard. After completing nearly $6,500 in improvements, we relisted the property for $151,000 and began to receive significant interest in the building.
Our first offer was from an owner occupant who wanted to live in one of the rental spaces. However, we were also trying to rent the basement unit which had recently been renovated. When we found a prospective tenant, we notified the buyer who authorized us to sign the lease. Unfortunately for the buyer, this torpedoed his loan since his financing went from owner occupied to non-owner occupied. His downpayment increased from 3% to 25% of the purchase price. Whoops! The transaction had to be cancelled.
We put the property back on the market and we immediately recieved an offer from an inexperienced agent representing an expatriot buyer who lived in Asia. The buyer never ordered an inspection and then cancelled the contract the day of the financing deadline under the auspices that “they didn’t get their bonus”. Uh…sure.
At this point the seller was obviously concerned that we were receiving offers from unprepared buyers who were fumbling around and wasting time. Fortunately, our third offer was the charm. We received a full price offer and went under contract in November. Due to regulatory changes, the contract took a little longer and finally closed this last week.
Congratulations to our seller! The buyer has also retained us to continue managing the property and we welcome our new client!
If you have investment property that you would like to sell or have professionally managed, CONTACT ME, let’s discuss your needs.
