7 Units - Affordable Housing Project

[Joshua Christensen]

Investment Info:

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

Purchase price: $1,100,000

7 unit single story apartment complex.
This is a Syndicated deal that we are General Partners and Co-Sponsors in.
The units are 1 bedroom 1bath. They are all Voucher affordable housing homes. Many Sect 8 and other agencies.

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

We Syndicated the deal and provided a nice return for our investors. The numbers and the ability to participate in a highly underserved segment of the market with Sect 8 and Vouchers made sense.

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

My partner lives in Phoenix and sourced the deal

How did you finance this deal?

Bank financing

How did you add value to the deal?

We improved 5 of the 7 units. The units were undervalued in rent. By moving to the SECT 8 model, we were able to increase the rents with $5-600 premiums per unit.

What was the outcome?

We're still working the business plan. Currently, after renovations, we have 2 remaining units to lease.

Lessons learned? Challenges?

We missed some simple things on inspections. We did not do a sewer scope which turned out to have some issues, so that ate into our CAPEX budget. We also chose the wrong property management company who promised they could turn SECT 8 units easily. After 5 months, they did not lease any. We took over the management and built relationships with the various agencies and have been leasing the units more regularly with 2 vacancies remaining.

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

No.