Converted nine unit multifamily property

[Mario Reyes]

Investment Info:

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

Purchase price: $165,000
Cash invested: $175,000
Sale price: $205,000

Hello BP Family,

This is my first investment property in real estate—a great location, next to a high school, park, Kraft, and near downtown. I have partnered with someone with excellent construction skills, and we plan to renovate it completely. According to appraisal "As is" value is $185,000 and $600,000 ARV. I am currently asking tenants to move out and planning to start renovations in May 2022; looking forward to connecting and continuing learning with the BP family!

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

* Great location
* Multifamily
* Value add opportunity
* Partner with great rehab skills

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

- I became a real estate agent to be able to work directly on my deals.
- After the property sitting on the market for almost a year, we waited a couple of months after asking for financials and rent-roll to create some urgency (Seller lower the price after four months). After inspection and re-hab cost estimation, we offered $160,000, seller counter with 170,000, and countered again and closed at $165,000.

How did you finance this deal?

My partner put in the downpayment, and I took the mortgage for a 50/50 split.

How did you add value to the deal?

I found and negotiated the deal as a real estate agent. I negotiate and oversee the budget and bids of the project. Also, I will manage the property and help as I learn with rehabbing.

What was the outcome?

We earned $20,000 instant equity with the acquisition, and we are now entering into the renovation phase as we wait for tenants to move out by the end of April.

Lessons learned? Challenges?

- One of the biggest challenges has been finding and negotiating with architects. Big players around the area have been doing major renovations in the area.
- Negotiating with tenants to move them out of the property to avoid evictions while we find an architect to work on our project.

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

I was the real estate agent. Currently, I am looking for FHA and hard money lenders.