Multifamily Acquisition Success

[Cassidy Burns]

Investment Info:

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

Purchase price: $1,625,000
Cash invested: $358,000

-17 Unit Mixed Used Multifamily Asset
-15 Rental Apartments ranging from studios to 2 bedroom flats
-2 Commercial Storefront both on mid term leases to 2026 (Flower shop & American Indian Cafe)
Value add opportunity by raising rents over time with slight renovations. All residential apartments $175-$225/month below market rate rent.
Current: $12,375/month
Projected: $16,100/month
-We will be adding 1 unit in the storage closet as well.

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

We are actively buying mid to large size multifamily in the Harrisonburg / Shenandoah Valley markets.

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

Brought to me off market by a broker. Original price was $1,700,000. We agreed to terms at $1,625,000

How did you finance this deal?

Commercial financing.
Terms:
25 Year Ammorization
20% Down ($325,000)
5.975% interest rate

How did you add value to the deal?

We will add 1 unit, converting to a 18 unit building, and then getting all residential units to market rent. Currently under rented by ~$175-$225/unit

What was the outcome?

Just acquired.

Lessons learned? Challenges?

Insurance is getting more expensive! Pro Tip: during underwriting, make sure you are underwriting for the tax bill to increase at year 2 following acquisition.