$474,725.00 Wealthier Today...

[Austin Fruechting]

You make your money when you buy! I'm closing on a 22 unit portfolio that consists of 12 single family homes and 5 duplexes. The sellers first offer for the package deal was $1,140,000. Through a LOT of strategic communications and negotiations, I eventually got them to accept a price of $790,000. 

The appraisals came in at $1,264,725... $474,725 above the sales price! So just by closing on this deal my net worth goes up by nearly 1/2 a million bucks. 

.

But this gets even better... 

Since I bought so well my bank only required 10% down of everything including closing costs. I sold a 6-unit building which net just enough to 1031 for the down payment on this portfolio. So there will be no money out of my pocket to purchase the portfolio. 

There's a value add play too. The properties need approximately $200k in work and I wrote the contract for $890k with a $100k credit at closing. My bank will escrow that $100k for me to draw on as work is completed. 

I will only have to come up with the ~$100k to finish out the work. I'll do some of it cash and I'll pull some short term debt at the end. Then when the work is complete (6-8 months) I predict the value to be ~1.55 million. At that point I'll refinance at 70% LTV which will put ~$300k back in my pocket and cash flow ~$3k per month (my 6-unit was about $1k per month)

SO +1/2 Million net worth... with no money out of pocket to buy... AND half the rehab costs are covered... 

THEN at refinance +$200k cash in my pocket from before the deal... AND +$2k more in cash flow

[Austin Fruechting]

Originally posted by @Aaron Raymond:

Nice work! Thank you for sharing. Can you elaborate some on how you got the purchase price down so much?

Thanks!

 There was so much involved in making this happen, way to much to write out here. The amount of emails back and forth to get there is incredible. The best negotiating book I've read so far is Never Split the Difference