Just closed on my first deal

[Mack Benson]

1,260

That is how many days it took to close on my first investment property.

This 2021 build class A 40-unit apartment is what I've been working toward for over 3 years. What was a dream is now reality!

Of course I couldn't do this alone, my beautiful bride has supported me throughout all of this, knowing I was doing what I was doing to make a better future for us and our kids. In that time we went from 1 to 3 :)

This deal proved the value or partnerships Johnny Nelson, Christa Nelson, Mike Konstantas, and Gwyeth Smith. It also shows how important great mentors are Bill Ham, Gino Barbaro, Jake Stenziano, Marco Barbaro, Darren Light and Hadar Orkibi all helped with education or a kick in the butt when needed.

About the deal:

Johnny and Christa were doing direct to seller marketing and came across this seller who was in the process of constructing the building. When we toured it there was sheetrock on the 3rd floor and only framing on the first. Finishing was months away but we had a vision.

2021 built 40 unit along with the next door quad for a total of 44 units.

Throughout the process people wondered how this fit our business model of a value add property. To us this was clear. We were purchasing the property at a deep discount because it would be vacant when we took over. Our value add is to perform the lease up and stabilize the property. Once complete we will have enough equity to be able to refinance into long term debt

What we've learned - A better question is what we haven't learned. We initially pursued this as a syndication and later pivoted when the seller offered seller financing on a contract for deed. There were also considerations for 1031 that needed to be taken into account. With it being a new and vacant building we knew agency debt was out so we went for local bank financing, then we went for bridge financing and started working with a mortgage broker who was able to leverage multiple financing options. Still seller financing won out in the end. There were construction delays and delays with the city and then delays working through the contract updates with the seller. This pushed our close back almost 5 months. In the end the delays allowed us to acquire the property over 50% occupied rather than at 0% we initially underwrote for.

This deal has taken 210 days since we got the contract signed until closing. There have been countless meetings, calls, texts, and conversations but we finally made it! Hats off to the team, especially Christa and Johnny who have taken on far more than we initially thought.

Time to get it stabilized and on to the next one!