SOLD! 12 units for $1.395M

[Tony Stephan]

Investment Info:

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

Purchase price: $900,000
Sale price: $1,395,000

SOLD! 12 units for $1.395M

Deal Breakdown Below:

Questions about this deal? Let me know!

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

Good area with value add potential and poor previous operations/management. This was a management and operational play. The previous owner had delinquencies, vacancies, as well as deferred maintenance and very below market rents. We cleaned up the issues and problems, and maximized the income which increased my NOI.

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

Off market through a broker relationship.

How did you finance this deal?

80% LTV, 10 year fixed rate at 4.25%, 25 year AM with a local CU.

How did you add value to the deal?

Even though it was a great property with great cash flow, it was a bit far for us to continue to manage (1 hour away from our core properties.) and I maximized the NOI, so it was time to move on. Now, we will take the proceeds from this sale and move it into a larger deal to repeat the process again.

This is called VELOCITY of money - How fast can I trade up to bigger and bigger assets and use the same dollar over and over again to increase my net-worth, cash flow, and balance sheet.

What was the outcome?

Sold $1.395M

Lessons learned? Challenges?

Management is everything and operations is the key to success in multifamily. I would’ve negotiated harder on my purchase for seller concessions. There was a lot of deferred maintenance we had to clean up during our ownership that I should’ve negotiated credits for.

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

The Stephan Group Real Estate