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Updated about 2 years ago,

User Stats

18
Posts
18
Votes
Krystle Moore
  • Lender
  • San Diego, USA
18
Votes |
18
Posts

12 units purchased in June 2022

Krystle Moore
  • Lender
  • San Diego, USA
Posted

Investment Info:

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

Purchase price: $3,875,000
Cash invested: $1,317,500

12 unit apartment building with upside in rents. Increasing income by renovating units as they turn and adding laundry to each unit. Will also convert existing laundry room to ADU for additional income.

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

Never lost a dollar investing in apartments. It's a long game but the cashflow is forever.

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

I found it through a broker that I work with. We had actually done financing for the seller in the past so it was easy putting the deal together since they knew who we were and that we perform. We ended up negotiating a $35K seller credit for the roof (it needed to be replaced).

How did you finance this deal?

We got a 2 year bridge loan tied to 6 month SOFR with a 1% cap per adjustment. It's been a little painful but overall, I think the timing will be good to refinance in 2024.

How did you add value to the deal?

We got rid of a few bad tenants and renovate units as they turn. Also adding laundry to the units. We are not aggressively vacating the building like we have done in the past. There is alot of attention on investors who are doing that and the city is trying to pass more strict tenant protection laws. We will do it slowly over time and still reach the same cashflow. As is, we are getting higher rents than forecasted when we bought the building.

What was the outcome?

We are getting $150-$200 more on renovated units than projected.

Lessons learned? Challenges?

We have professional management and I let them do the first 2 units for the first time. It took a long time and it costed more than when I use my guys. I did one unit recently in half the time and less than half the cost. I will be doing all turns in the future. I have always done them in the past but was busy and hoped they could take care of it for me but when it comes to renovations, owners should be directly involved. It can save a ton.

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

Absolutely - Florian Sighe at the Browar Group represented us & the seller. I don't usually like agents double ending deals (difficult if not impossible to properly rep both sides) but he did an amazing job, was diplomatic, guided us & helped us to the end. Excellent communication and making it a win win for both sides. He has become a friend and a great referral partner, I would use him again in the future. We financed the deal ourselves (I am a mortgage broker) & I highly recommend us!! :)

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