Just bought a 78 unit disaster...

[Tom Lafferty]

We just purchased a 78 unit property in the DFW area that had horrible management, tons of deferred maintenance, and 25 vacant units..... hope I don't regret it!  Thought it might be interesting to those looking at multifamily??

Here are a few details:

-20 investors w/$25k-$100k each

-Purchase price: xxxxxxx (removed in case appraisal district starts snooping around!) Taxable value right now is about $2,300,000

-Loan: Full recourse 75% LTV (including 75% of $450,000 rehab budget), 5 yr term, 25 year amortization, 4.5% interest with interest only year 1

-Age: 1968

-Individual HVAC and Hot water heaters

-9 down units have been "down" since 2007!!

-Professional management w/1 full time manager and 1 full time maintenance tech

-Plan:  Full exterior rehab, renovate all down/vacant units, move office from TWO units that are currently being used to the abandoned dedicated office that is down to the studs.  After a year to 18 months, we'll look at a sale if the market is still crazy, or also consider a refi into fannie/freddie debt.   

Most challenging deal I've encountered due to having virtually NO records from seller; so please don't ask what the cap rate was!  Just know that it would be horrendously low based on actual numbers.