40 Unit Master Lease Purchase in Cincinnati area!

[Joseph Cornwell]

Investment Info:

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

Purchase price: $1,450,000
Cash invested: $200,000

40 1- bedroom units in Lockland, Ohio. This property was purchased via master lease option. We are going to be renovating the units, raising rents to market, optimizing management, and in 12-36 months, buy out the seller via the option.

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

I have been looking for mid-size multifamily for several years. These types of deals are hard to find.

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

Existing relationship with the seller for 8 years from real estate meet ups and networking. He wanted to sell it to someone who would provide a good service to his tenants. We worked out a lease option that was a win win situation and gives him a long run way to 1031 out of this deal into a larger one.

How did you finance this deal?

Via lease option, zero down. 12-36 month option to buy out the seller.

How did you add value to the deal?

We are renovating units and raising rents to market. Average current rents are $580/mo market rents area $725/mo. Should add approximately 600k in value or more.

What was the outcome?

Still in progress, but ARV should be 2MM plus.

Lessons learned? Challenges?

So far the only challenge has been many of the tenants do not speak English, so navigating that aspect. Also the first few units we are turning had mold issues we are correcting.