12 Unit Deal in Pace, FL

[Matt Jones]

Investment Info:

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

Purchase price: $1,215,000

My wife and I partnered with a few friends and past clients to buy a 12 unit property(three fourplexes that share a parking lot and dumpster) in a growing suburb of Pensacola, FL that is known for its great school district. The units were in very good shape overall but dated inside. We will be updating them as we have any vacancies and raising rents to market for new leases.

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

I have been interested in syndication for several years and this was a first step to doing bigger deals. I'm excited by both the deal itself and the lessons learned along the way.

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

I'm a real estate agent and I set myself to receive an alert anytime that a multifamily property is listed anywhere between Navarre, FL & Perdido Key. I received an email when this property was listed and I jumped on it immediatley.

How did you finance this deal?

Commercial Bank Loan

How did you add value to the deal?

We structured the terms to win a multiple offer situation without overpaying. Also, two units were vacant at the time the property was listed due to recent move-outs. We had those units left vacant so that we could do a cosmetic renovation and increase rents. Overtime we should be able to push rents 20-30% by performing interior upgrades as units come vacant. We were also able to secure insurance at 60% of what the current owner was paying which made a huge difference in the cash flow.

Lessons learned? Challenges?

All of my previous investments have been solo(or with my wife). Bringing on partners adds a layer of complexity and most importantly takes some extra time. We were pressed to close on time but managed. I would allow more time on future deals. As the largest percentage owner and the manager for the deal I also took on additional responsibility, financial and otherwise, and would probably price it into the deal to be compensated for that additional work in the future.

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

I was the buyer's agent for this deal.