Updated about 3 years ago on . Most recent reply
Philadelphia new construction apartment. Legacy project.
Investment Info:
Large multi-family (5+ units) commercial investment investment.
Purchase price: $135,000
Cash invested: $915,000
10 unit new construction apartment building in North Philadelphia.
What made you interested in investing in this type of deal?
We increased our zoning density by 20% by appealing the zoning.
How did you find this deal and how did you negotiate it?
The property was a distressed two lot assembly and is only 33 feet wide.
How did you finance this deal?
We borrowed $200,000 in private funds and the balance in bank debt that we refinanced upon stabilization. Initial investment was $1.05M. Appraised value was $1.8M upon stabilization and the refinance recovered 100% of the initial investment.
How did you add value to the deal?
By increasing the entitled density and by constructing the project at $92 per square foot in hard cost.
Lessons learned? Challenges?
We nearly collapsed the neighboring house which shared a party wall. We needed to have a better shoring plan. We ended up underpinning the neighbor's foundation with new concrete footings in three foot sections over the span of several weeks. The neighbor's back yard collapsed into the excavation hole. We built a concrete dam to properly hold the neighbor's back yard on their property.
