42 unit-low income-building cash

[Zach Andregg]

Investment Info:

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

Purchase price: $1,100,000

A low-income 42 unit apartment complex built in the 60's.

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

I worked for the owner for several years and grew to know all of the tenants and systems the owner had.

How did you finance this deal?

A family friend let me use a building that he owns outright as collateral for the down payment. The sale price was low enough compared to the appraisal so the bank didn't require any money down.

How did you add value to the deal?

This property was built with a boiler system. Its a central heating and air system that disperses hot or cold water to each unit through a network of pipes. Each unit then had it's own separate A-coils and blower fans. This means that I pay for the water, gas and electric to cool the condenser in the summer. Each tenant pays their own electric, so I have been upgrading each electrical panel and putting HVAC units in each unit, this saves me about $20,000 a year in utilities.

What was the outcome?

This is a buy and hold property for the foreseeable future.