Small MF deal just locked up!!

[Dave Rav]

Hey fellow BP folks! I am excited as I just locked up a small MF deal in Columbia, SC. Came across the deal on the MLS by happenstance and couldn't believe the numbers. At a cursory glance, the conservative cap rate is at least 7-8%.

Purchase price $168k.  

Price per unit is $42k, which is pretty good in my opinion.  Now, I do need to mention the types of properties we have here.  There are (1) stick built home and (3) MHs.  Additionally, there is a 5th unit but I was unable to confirm occupancy permits, legality, and proper zoning of this structure - therefore I am NOT counting this in my analysis. 

100% rented (I will be getting leases to prove this)

Utilities- septic (definitely not excited about this, and you better believe I will do my diligence here)

Value add opportunities - Increase rents by minor upgrades on at least 1-2 units.  Add storage (boat, camper, RV space rent).  Get that 5th dwelling an occupancy permit and rent it for at least $550-650/month conservatively.

Purchase method: Unsecured business LOC + bank financing. I have spoken to a local bank the loan officer says they are ok with loaning up to 80% LTV, even if my 20% comes from another source of credit (LOC)! I thought this was amazing, as typically they want to see "your own cash" in the deal as skin in the game. I explicitly told them I would use an LOC for the DP and they said "ok". Pretty neat.

I am certain there are more details folks may want, but I'm going to leave it here for now.  We can always further the discussion in the comments.  Your feedback is appreciated!