First Syndication - $20M 132 Unit

[Jonathan Bombaci]

Investment Info:

Large multi-family (5+ units) buy & hold investment in Lowell.

Purchase price: $20,000,000
Cash invested: $4,700,000

Contributors:
Nathan Gianino, Matthew Perimian, Todd Wheatley

This was our first syndication. We purchased a 132 unit apartment building in a great part of Lowell MA with 45 investors. Half were accredited and the other half sophisticated (non-accredited) investors. We locked this up under contract during the height of covid in 2020 and closed on it with 20% down, non-recourse, assumable, agency financing at sub 4% interest rate. This has been a heck of a project and we’re looking forward to doing more!

What made you interested in investing in this type of deal?

It was a great price at a time when the world was going crazy. We locked it up for a year at $20M and it appraised at $21,500,000 as-is.

How did you find this deal and how did you negotiate it?

It was on and off loop net for years but the market finally appreciated to a point where the price made sense and the seller became more motivated which made the deal possible.

How did you finance this deal?

Agency Financing. 20% down, 3.7% interest, fixed for 7 years with 2 years of interest only.

How did you add value to the deal?

Renovating units and increasing rents from $1250 to $1700 which is a 36% increase.

What was the outcome?

Buy and hold with a 4-7 year exit plan. This is still a work in progress

Lessons learned? Challenges?

So many lessons learned on this one and we talk about it at our monthly meetups regularly.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

My team of investor focused agents at Candor Realty, Doug Mercurio’s law firm in North Reading, Jim Silva our SEC attorney, and CBRE provided the financing.