Buy and Hold, then Sell

[Stewart Beal]

In 2016 I received a call from a real estate investor who had recently purchased 423 Washington a 18 unit apartment building in Monroe, MI. He said, Stewart I am in some serious trouble, I hired a property management company and they took occupancy from 16 of 18 down to 6 of 18, and they haven't rented an apartment in several months, I am bleeding cash. To make matters worse, the City of Monroe condemned the building today, they installed a illegal occupancy notice on every door in the building, I think the other 6 residents are going to move out, and the bank will take my property. I said, don't worry, we can straighten this out, hire me to be your property manager. He hired me, I called the current property manager and they said you can't fire me, and I said, look at what is going on, you can't be serious, they said no way, we are not fired, I said, I am taking over, I noticed the 6 tenants, changed the locked, and touched base with the City. We never heard from the former property management company again. The City said, the property management company has been ignoring us for months, all we need to do is an inspection, we posted those notices to get their attention. So my team and I got to work, we resolved the city issues, and signed the 6 existing residents to 2 year leases with a fair rent bump, and then leased the other 12 apartments in 3 months. I visited the property for the first time and noticed, hold up, wait a second, there is a 9 car garage at the property. I called the owner, he said, oh yeah, I forget, what do we do with the 9 car garage. I said, man, 9 car garage! That is like adding a 19th apartment! We advertised the garage units and quickly rented them for $600 a month total effectively adding a 19th unit to the building. Once the building was full the owner said, Stewart can you sell the building for me, this real estate investment isn't for me, I said I will do you one better, I will buy the building for $475,000, he said, I need $510,000 and you have a deal which I quickly agreed to. Fast forward to 2020, we have owned the building for 3 years now and have posted 3 solid years of rent and NOI growth, we sold the building today for $939,450.00 booking a profit of $429,450 in 3 years.Please note, I have investors and partners in this deal and they contributed to its success.