8 Unit Multifamily Value Add!

[Tony Stephan]

Investment Info:

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

Purchase price: $1,800,000
Cash invested: $360,000

8 unit multifamily apartment purchased as a package deal with a 12 unit in Fenton MI for $1.8M. I'm 100% owner without any investors or partners. Value add multifamily play with below market rents and inefficient management. We were able to improve the NOI on both deals and achieve a new valuation of $2.55M in 2023.

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

Great area and value add potential.

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

Off market through a broker relationship I made on social media.

How did you finance this deal?

80% LTV with local credit union. 4.25% rate for 10 year term / 25 year am.

How did you add value to the deal?

Improved management, reduced expenses, increased NOI.

What was the outcome?

$2.55M valuation in 2023. Cash out refinance in 2024

Lessons learned? Challenges?

Try to by 20 units in one spot vs a 12 and an 8 in two different cities for management efficiencies.

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

My wife is the broker I use and recommend.