Sale of Mobile, AL Historic District 5-Plex

[Heather Colson]

Investment Info:

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

Purchase price: $485,000
Sale price: $455,000

Serving as the exclusive listing agent for this 5-plex located in the mid-town Mobile Old Dauphin Way Historic District. This property was situated on a large lot, and included 4 units in the main home, with single studio unit carriage house to the right of home. All units had been updated with newer appliances, mini-split units, and contained a unique amenity specific to each unit. Rear laundry on premises for tenant access, front parking, rear courtyard which had plenty of value add potential.

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

My seller for this property located me through another multi-family listing I had recently represented it that area, also obtaining substantial results for that seller. He was impressed in my representation of that previous property, my thoroughness of information provided to the public, and my skills in negotiating a phenomenal sales price (in-spite of that properties distressed nature and need for repairs).

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

My experience in representing other multi-family property owners in the sale of their investments was already well known in the area. My seller was an older owner-occupying landlord, and was ready to retire. The property had been very well maintained, and was perfectly situated in a professional district, near new multi-use construction, and in proximity to medical campuses and centers. The property was under-utilized in rents, but also contained huge potential for value adds to the property.

How did you finance this deal?

The buyer who purchased the property did a cash-out refi on multiple other properties and used the proceeds to finance the purchase.

How did you add value to the deal?

Providing a skilled and thorough evaluation of the property to know inside and out what its current use is and what the value add potentials are for the property, having all documentation and tenant records readily available, and being able to provide P&L statements for any potential buyer is essential in facilitating a smooth deal. Having a skilled representative to navigate the complexities of multi-family evaluations, acquisitions, and dispositions is crucial to my client's success.

What was the outcome?

My seller was able to secure $30K above list price, a quick sale, and purchase a waterfront retirement property with the proceeds; the buyer appreciated the documentation provided to facilitate a smooth transaction, and the onsite evaluation and collaboration regarding value adds he had not initially thought of prior to our meeting; this sale provided crucial data needed to comp other multi-family properties in the midtown area, and dramatically raised the value of those surrounding properties.

Lessons learned? Challenges?

There was no challenge presented, that I wasn't able to creatively meet and manage!

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

Heather Colson - Keller Williams Realty Mobile/Springhill