Off Market 26 Unit Apartment Complex

[Steven Nguyen]

Investment Info:

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

Purchase price: $460,000
Cash invested: $200,000

Off market deal from direct mail campaign
26 unit apartment complex
Self-managed by prior owner
95% occupancy day 1
Can increase rent by $300 month per unit after renovations
No broker involved
Purchase price: 520k with 60k in seller repair credit
Loan Terms: 4.3% 10 years fixed / 30 year AM / 25% down (reduced by repair credit)
Appraised value: 750k (230k equity day 1)
Offered: 1.3 million without renovations, but looking to BRRRR this property
Renovation budget: 200k
Expected ARV = 1.3-1.5 M

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

Single family homes in CA average over 1 million
Wanted to diversify outside of CA and focus on cashing flowing apartment complexes to help me leave my W-2

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

Off market deal through direct mail
Owner was an attorney and we communicated via email
No brokers involved so worked directly with seller
Owner was looking to retire after self-managing this apartment for 15 years

How did you finance this deal?

25% down (60k in seller credit to lower down payment)
4.3% interest 10 years fixed / 30 year AM

How did you add value to the deal?

Around 8k per unit of renovation - LVP flooring, new kitchen cabinets, fresh paint, new bathtub
35k for new roof

What was the outcome?

Looking to do a cash out refinance after renovations are completed, units rented at market rents, and stabilized
Expected to pull out initial down payment, renovation expense, and profit 400k

Lessons learned? Challenges?

Renovation was delayed by 8 months due to labor shortage
Tenants will leave and not pay once a new owner takes over