2515 Kenton St - Multifamily Syndication

[John Galloway]

Investment Info:

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

Purchase price: $904,000
Cash invested: $207,000
Sale price: $1,265,000

Project IRR (without fees) - 97.81%
Equity Multiple - 2.34x

This was a syndicated real estate project in the city of Aurora in Colorado. We purchased an 8 unit building off market, re-leased it, remodeled the units, and then sold for a profit 18 months later. I was responsible for the project acquisition, fundraising, project management, and sale of the asse

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

My team has a ton of C class multifamily value add experience and we knew we couldn't pass up this opportunity when it came to us off market. We are very comfortable with the Aurora submarket, stabilizing, and implementing new property management. The project just fit really well.

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

We came across this deal off market via the listing agent. It was not in proper shape for the broader MLS and the owner wanted to sell direct to an experienced investment team.

How did you finance this deal?

We financed this deal with a multifamily mortgage through FirstBank.

How did you add value to the deal?

We replaced the property manager, remodeled the units, rented out the storage units, and did a better job marketing the property for lease.

What was the outcome?

We executed our strategy with an internal rate of return of 97.81% and a 2.34 equity multiple before fees.

Lessons learned? Challenges?

8 unit multifamily is definitely a sweet spot between the smaller and larger multifamily investments. You can get economics of scale by purchasing multiple adjacent lots. These buildings are often built by the same builder and are essentially cookie cutter units.