8-Unit in Cincinnati

[Ian Cruz]

Investment Info:

Large multi-family (5+ units) buy & hold investment in Cincinnati, OH.

We purchased 8-units in Cincinnati, OH via a partnership on Fractional.

The property was fully occupied in 2021 when it was last transacted, but due to poor property management, the property slowly went vacant. We were able to purchase the property near the tax assessed value.

Our partners contributed an additional $150K for our reserves to address CAPEX items. We're expecting this to be a bit of work to get this up to speed, but will be a great property once stabilized.

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

I've buying buying properties in this neighborhood. My network owns other apartments on the same street.

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

MLS and our realtor negotiated >20% off the contract price due to adverse findings

How did you finance this deal?

Local Credit Union

How did you add value to the deal?

We positioned ourselves as the ideal buyer of the property - one that had enough in reserves to fund the capital expenditures needed to reposition the property.
This deal was a tweener - not turn-key, but it also not a perfect BRRR where the margin between our all-in cost and the ARV is high enough to use hard money and pull out ALL of your money in the deal. We used Fractional and our partners funded >$160K in reserves to position ourselves as the ideal buyer to operate the property.

Lessons learned? Challenges?

Relationships are important, and we had several parties (lawyers, contractors, PMs, our realtor, other investors, etc.) help provide guidance along the way. We also had one of the more comprehensive due diligence stages, which will prep us in the future.

A huge challenge is the tightening insurance landscape. Back in December 2022, you could still find high risk insurance for buildings with knob and tube. Now, no carrier will go near it.