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Updated almost 2 years ago,

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3
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Adam Carter
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3
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401 North 5 Unit Multifamily

Adam Carter
Posted

Investment Info:

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

This is a 5 Unit Apartment complex. 3 Units are currently leased to long term tenants and two units are run as Short Term Rentals.

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

My business partner and I were able to pick this property up for a bargain and was the first rental of my portfolio. This property had great structure, 3 recently renovated apartments we could fill instantly, and 2 apartments that we could renovate to improve the properties value.

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

This deal was on the MLS. We put in an offer below asking due to 2 out of the 5 units needing renovation. The seller accepted our offer.

How did you finance this deal?

Coming from a traditional business background and our first investment project in rentals, we financed this with a commercial note through a bank.

How did you add value to the deal?

We complete renovated two of the units, furnished them, and listed them for Short Term Rentals.

What was the outcome?

Once we added value to the property we went back to the bank and did a cash out refinance. We then used that cash to fund our next deal.

Lessons learned? Challenges?

I had three large revelations from this project. First, any property with 5 units or more is creates challenges for financing and insurance. Second, standard landlord insurance will not cover short term rental claims (luckily, we didn't learn this the hard way). Third, creative finance is key when growing your real estate portfolio.