14 Unit Secured as value add investment

[Chad Westfall]

Investment Info:

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

Purchase price: $250,000
Cash invested: $70,000

14 Unit Apartment Complex.
Purchased it with 6 units vacant and the property in not great shape.
Just about through renovating it now.

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

Always looking for value add deals

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

I called around to a lot of brokers to find a pocket listing that met my needs. Once I found this, I ran through the analysis and paid asking price.

How did you finance this deal?

Original financing was hard money that fell through at the last minute.

Back up plan was to use a local bank to refinance after the rehab was done. Luckily, they step in and help me acquire the property for the initial purchase and rehab.

How did you add value to the deal?

We have currently rehab 5 of the vacant units. Moved one tenant over and are renovating the final two units. I'm also in the process of updating windows, siding, etc on the exterior.

There is a lot of work that needs to be done to really make this place nice.

Lessons learned? Challenges?

Always have a back up plan when financing a deal. Luckily, I had one. But this experience really hammered that home. First hard money lender had me buy everything, pay for insurances, etc all before closing. Then decided the loan didn't meet their criteria (which I asked about to start with) and denied the loan.