37-Unit - HUD Section8 HAP Multifamily

[Lucas Miles]

Investment Info:

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

Purchase price: $814,000

37-Unit Multifamily - Section8 Building with a HUD HAP Contract
This is an off market opportunity that we closed December 2023, and our first deal in the affordable realm of multifamily.

Being a Section8 HUD building, there was an immense amount of paperwork and due diligence that was required. HUD performed extensive due diligence on us, and had to approve us as buyer's and our management company and mangers. Approval process took about 4 months. We learned a lot about project based Section8 buildings, but are now actively pursing more projects like this.

Overall the project was situated decently well at closing, occupancy was mid ~85%, and overall the property was in very nice condition. Little to no rehab/capex spending was needed. Current ownership was not local, and didn't have a presence anymore. Expenses at the property were were getting out of hand, and needed to be corrected.

Lending was another challenge, lending restrictions were starting to tighten up, and we had to get a bit creative with our lenders to get the financing we needed to close.

We raised 175K from investors to close the deal, and will be providing them with a quality return.

The property appraised for 1.4M the day of closing. We will quickly correct the excess spending, and fill the vacant units with quality residents. Our investors benefit from immediate equity creation, and long term predictable cash flow, overall a great investment for us!