HUD HAP Section 8 property in central Sioux Falls, South Dakota

[Craig Markhardt]

Investment Info:

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

Purchase price: $2,000,000
Cash invested: $695,000

HUD HAP Contract subsidized, 24 unit, two story garden apartment building with virtually 100% occupancy at all times.

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

HUD guaranteed rental income contract

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

Owner offered it as part of two other off-market properties we were negotiating on

How did you finance this deal?

Portfolio bank financing at 75% of purchase price

How did you add value to the deal?

We are evaluating best options for capital improvements, including creating a preventative maintenance schedule and communicating with tenants on a regular basis.

Lessons learned? Challenges?

The most challenging aspect is becoming a HUD approved property owner and manager. The vetting process to get our company (and myself) approved is extensive and paperwork intensive.