BRRR on a commercial deal

[Tommy Ray]

Investment Info:

Large multi-family (5+ units) commercial investment investment.

Purchase price: $365,000
Cash invested: $115,000

MLS deal that I bought on Day 1 and went heavy with cash. Asking price was $375 and they accepted a $365 cash offer. The property consists of 4 lots w/dual road frontage for a total of 2.12 acres. The old owner had 6 tenants that were friends or family and had not kept up with prevailing rental rates.

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

Growth in the area is through the roof.... Bought 1581 Parkview, Canyon Lake TX for 130,000 7 months ago... Comps out at 179,000 now. That is HUGE. Overflow demand in Austin, New Braunfels, San Antonio and San Marcos. There are comps on the the land a few miles down the road at over 600K for the raw land.

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

Found on MLS and offered cash to a weary seller who had a trash covered pig...

How did you finance this deal?

Cash deal--will cash extract using a local bank or credit union after we got the leases and cash flows in place and stable for them to see.

How did you add value to the deal?

Clean it up, de-populate it for a total reset. Will add storage for additional rent to the offering. We will add superior marketing and management as well ....

What was the outcome?

Nice asset in the balance sheet

Lessons learned? Challenges?

Contractors are always problematic... Nothing new there

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

Yes but I have 32 years at this and I cherry pick my A-team on anything new / evolutionary