AIB college campus flip

[Jason Grove]

Investment Info:

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

Purchase price: $5,350,000
Cash invested: $800,000

This was a college campus. I purchased the campus with 7 total buildings including 4 office buildings, a gymnasium and two apartment buildings with 93 units. The idea was to rezone the property, put each building onto separate parcels and sell all the properties except the Apartment buildings which we renovated all units and common areas and leased to new tenants for a long term buy and hold multifamily property.

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

I am looking for out of the norm investment opportunities that are not on the radar of most investors in an effort to keep the competition down with fewer offers and increase my change to acquiring for the right price. Tough to find these type of deals, but they are very exciting when you do.

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

Found this through a RE broker friend. The college couldn't make ends meet financially and handed the property over to the state. The deal had to be negotiated through the Board of Regents.

How did you finance this deal?

I leveraged an investment team and the stacked collateral of another property I own.

How did you add value to the deal?

Selling off the office buildings separately paid down the financing taken out. The entire campus was vacant so there was no income at all. Had to renovate all 93 apartment units and begin renting them out.

What was the outcome?

All office buildings are sold and the gymnasium is sold. I know own the 93 unit apartment building and it is 95% occupied with roughly a $30k monthly cashflow.

Lessons learned? Challenges?

The rezoning process through the city took much more time than I projected. I thought it would take 4-6 months and it took closer to 8-10 months. Separating the utilites for electric, gas and water for each building to their own individual meters was quite the undertaking and more expense and time consuming than expected.

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

CBRE was my commercial RE Agent and they helped a lot get the property under contract and get the office buildings and gym sold quickly.