Looking for a partner on a 12-unit BRRRR in Cleveland, OH

[Kyle Lewis]

My partner and I have a 12-unit building in Cleveland, OH under contract and are looking for another partner to join us on the deal. Below are details of the deal:

Purchase price: $170,000

Rehab cost: $100,000 (have received 3 quotes from contractors)

ARV: $456,543 (based on income approach to valuation and 10 CAP)

Units: 12 (all 1BR/1BA)

Our strategy:

• Create safe, clean, and updated units for tenants.
• Increase rents to market rate. As the area develops (see next section), continue raising rents.
• Reach $45,654 in NOI
• My partner and I love cash flow, but would be open to selling at the right price in 3-5 years.

Why we love this deal:

• This development is in progress across the street and this development 2.5 miles away has broken ground.
• Only a 3-minute walk away from the property is a light rail station, which provides service to downtown Cleveland in 20 minutes.
• Property falls on the border between Cleveland and Shaker Heights. The property address is Cleveland (lower taxes) yet the property sits inside the Shaker Heights School District.
• Value add opportunities:
• We can convert one of the units from a 1 bedroom to a 2 bedroom.
• Purchase coin operating laundry to increase monthly income by $215/month.
• Appraised at $200,000 in 2014.
• Strong rental comps in the area.
• Already conducted our home inspection. No major concerns.

Risks/Cons of the deal: Poor historical performance. Current owner purchased the property sight unseen and has never put in the money or effort required to properly reposition the property. While the historic rents make it harder to get funding, it is also the reason we’re able to acquire the property at a great price.

Why we’re looking for another partner:

• Due to poor past property performance, we’re having difficulty finding financing for the purchase/rehab. Bringing another partner onboard will help us raise/pool funds.
• My partner and I want be active in this investment and are willing to perform a lot of the legwork, but could benefit greatly from adding someone with significant experience to our team.

The partnership: We have a few ideas but are also flexible and open to suggestions on how to structure this partnership.

Here is a link to the BRRRR Analysis

If interestested in partnering, please feel free to contact me for more details.

Thanks!

Kyle