Bel Aire Apartments in Burlington, Iowa

[Chase Gibb]

Investment Info:

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

Purchase price: $1,700,000

I invested in the Bel Aire Apartments in Burlington due to its potential for long-term cash flow and appreciation. Networking led to the opportunity, as the previous owner reached out to me through our local REIA. Traditional bank financing was used, despite a timing challenge with multiple deals transacting at the same time. Value was added through unit rehab and amenities, with more improvements planned. Despite initial maintenance challenges, the property is performing with a bright future.

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

I had been eyeing multifamily apartment investments for some time. The appeal lies in consolidating all aspects of the investment onto one property, coupled with the desire for steady month-to-month cash flow and the potential for long-term appreciation. As a buy-and-hold investor, I saw the Bel Aire Apartments as a prime candidate for a long-term hold.

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

My connection with the previous owner, who happened to be the president of the Southeast Iowa Property Owners, Real Estate, Investment, and Landlord Group—an organization of which I am now the president—played a pivotal role. Networking over the years fostered a relationship where when she was ready to sell, she reached out to me. Negotiations were smooth due to our established rapport and mutual understanding of the property's value.

How did you finance this deal?

I opted for traditional bank financing, leveraging cash reserves I had accumulated over time specifically for investment opportunities like this. Interestingly, the timing presented a challenge as two potential deals emerged simultaneously, creating a bit of a crunch. Nonetheless, traditional financing proved to be a reliable option.

How did you add value to the deal?

Adding value to the Bel Aire Apartments involved a multifaceted approach. I initiated unit rehabilitation, bringing rents up to market levels, and introduced several amenities that were previously unavailable. Continual property improvements are ongoing, with a projection of reaching maximum efficiency in the next 4 to 5 years.

What was the outcome?

Currently, the property is performing well, generating consistent cash flow. Looking ahead, I'm optimistic about the trajectory of the investment and eager to see its continued growth and performance over the next few years.

Lessons learned? Challenges?

One significant lesson from this investment was the importance of addressing deferred maintenance promptly. Over the first 18 months of ownership, I grappled with the repercussions of neglecting this aspect, which ate into our cash flow significantly. Moving forward, I have prioritized diligent property maintenance to safeguard against similar challenges.

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

Absolutely, the success of this investment was greatly facilitated by a team of skilled real estate professionals. From my attorney to lenders, each played a vital role in navigating the complexities of the transaction. I'd be happy to recommend their services to others seeking similar investment opportunities in Southeast Iowa.