First out of state deal, first 1031 exchange, first larger multifamily, oh- and first auction- all in one!

[Jean Bolger]

well, this has been an exciting time! I sold my triplex in Denver that I have owned for about 12 years (which, btw, I never would have bought if I knew then what I know now, thanks to BP...) I was trying to maximize my 130k in 1031 exchange money so I started looking out of state- ended up focusing on Ohio.

I flew out to Columbus a few weeks ago to check out an auction property and today I was the winning bidder on 29 one bedroom apartments in five single story brick buildings. Final price 330k. It's currently bringing in 86k GOI with only 20 units occupied. Once the remaining units get filled that jumps to about 125k at current rents. (oh, and tenants pay utilities --including water...)

There is still so much to be done that it feels a bit premature to be posting this under "success stories", but I am excited and relieved and wanted to share! I would never have had the cajones to proceed with this without all the stuff I have learned on BP. I couldn't possibly name all the folks here whose posts have educated and/or inspired me, but you have my thanks! Now I'll start hitting you up with questions about how handle what I've gotten myself into :)

[Jean Bolger]

UPDATE: so it's a month later and I just got back from closing on the property in Ohio ............

And the news is good!! No big ugly surprises, even a few pleasant ones. The empty units are in pretty OK shape, most of them will be rentable with just cosmetic rehab and some appliances. A few will need water heaters and/or furnace replacement. (Of course there are actually two more empty units than were disclosed originally, and three of the current tenants haven't been paying for months, but I was pretty much expecting that sort of thing)

One big relief, though, is that I'm pretty sure I have found a good management company. (I was basically won over when one of the references I called told me she worked for a competing property management company but had these guys handle the properties she owned). I spent several hours at the property with the two principal agents, their head maintenance guy, and the landscape/exterior repair guy, coming up with a strategy for the next few months. They specialize in this type of lower income rental property and are quite convinced that they can rent the rehabbed units for at least $50 more month than I was figuring.

Finance-wise, I ended up doing a cash deal with money from my Heloc and some personal funds (in addition to my 1031 funds). It was just too tight time-wise to do anything else, since the auction terms demanded a 30 day close. My plan at this point is to do a refi to get my cash back out after the property is fully stabilized, hopefully in six months, perhaps a year.

So, once again: BP folks, I extend my thanks. I could not have done this without you. Seriously. Thanks.