7 SFH's on 3.5 acres with room to expand

[Michael Jackson]

Investment Info:

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

Purchase price: $1,600,000
Cash invested: $320,000

Purchased 7 SFH's on 3.5 acres from Bethel Bible Village. Properties had already been updated when the organization decided to put renters in them.

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

I loved the potential it had. It was already a great deal with rents at $14,000 total when we purchased (and has been raised since then). However, there is a popular elementary school within walking distance and a greenway, dog park, and kayak drop within a 1/4 mile. The best part is that it is already zoned and surveyed for more properties.

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

I heard a rumor from one of the tenants that they might be interested in selling so I drove over and found their offices and went in and inquired. The office manager was confused because the board had yet to discuss it. I gave her my card and then called the agent they used to list them for rent. I let both of them know I was serious and would love to purchase them.Ultimately, we were able to acquire the properties and they have already been surveyed to add additional units.

How did you finance this deal?

What was amazing is we were in the process of refinancing our other 19 units. We had built so much equity in the 2-3 years we/d owned them that the bank let us use the equity from that refi as the down payment so we didn't have to come out of pocket 320k.

How did you add value to the deal?

We have increased rents by a total of about $1,000 a month in the year we've owned them.

What was the outcome?

We have 7 cash flowing properties and are going to add many more in the near future on this property.

Lessons learned? Challenges?

creative ways to purchase and come up with down payments when you find a good deal