Value add apartment building purchase

[Jessica Kirkpatrick]

Investment Info:

Large multi-family (5+ units) commercial investment investment.

Purchase price: $600,000
Cash invested: $80,000

10 unit purchase. Offer accepted out of 5-7 other others, several of which were cash. Mine was financed, but I had credible lender and good rapport with listing agent. Also, waived any seller repair requests and purchased sight unseen. Analyzed deal and big up to $50K over list price.

Cap went from 8.39 -> 13.08, GRM went from 7.43 -> 5.75, expenses decreased 15%, income increased 24%, debt income went from 1.17 -> 1.82.

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

Location, character, potential

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

MLS

How did you finance this deal?

Blanket loan

How did you add value to the deal?

I overhauled entire building right under a year. Major changes included, 6 apt rehabs (1 complete gut), foundation repair, serviced all 5 HVAC systems, plumbing, exterior paint job, new lighting throughout, wifi cameras and thermostats! Brough expenses down and raised rents to make up for utilities incl in rents.

What was the outcome?

Great!

Lessons learned? Challenges?

Kick out bad apples sooner rather than later. Don't back down to contractors and be too nice.

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

Im a Realtor and I worked with a commercial broker who I'd use again.