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Updated about 8 years ago, 10/02/2016
Made the leap to commercial real estate!
I have been investing in SFR for a few years now and I have always had my sights set on acquiring an apartment building. I closed on my first 8 unit apartment building a few months ago, although there is still a lot of work to be done. This is a success story for me just for finally getting over the hump and getting my foot into commercial real estate.
There have been a few bumps in the road but thankfully I have an excellent property management team who has lifted a lot of burden off my shoulders.
Already saving and looking for the next one, hopefully in the area of a 15-20 unit
#2 Rehabbing & House Flipping Contributor
- Residential Real Estate Agent
- Irvine, CA
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#2 Rehabbing & House Flipping Contributor
- Residential Real Estate Agent
- Irvine, CA
@Account Closed Congratulations on getting into investing in apartment buildings! That is a major goal of mine as well! What was your biggest challenge of getting to invest in that eight unit apartment?
- Peter Mckernan
@Peter Mckernan Biggest challenge - finding a lender that had a low enough minimum threshold that also had reasonable terms I could make work. This purchase was sort of an awkward in between property as far as lending. I found a lot of lenders who were looking for at least 500k or 1 million purchase price. Hard money lenders were willing but interest rates were outrageous.
Good luck! Feel free to reach out anytime if you need anything.
@Account Closed
Congrats on the first Apartment building!! Sounds like a great deal!
How did you finance the purchase and rehab? Hard money, private money, personal funds?
Also, how did you find this deal? Wholesaler, MLS, other?
#2 Rehabbing & House Flipping Contributor
- Residential Real Estate Agent
- Irvine, CA
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#2 Rehabbing & House Flipping Contributor
- Residential Real Estate Agent
- Irvine, CA
@Account Closed Great insight! Thank you! I will reach out if I hit some walls.
- Peter Mckernan
Took my partner and I some time to find a lender but ended up finding a small local bank that does commercial loans. Obviously the numbers are number one but they are big on relationships and working with people they trust so we sat down with the president, branch manager, and underwriter and sold ourselves.
Found the deal on the MLS
Congrats @Rob McFarland!
Congrats. You've achieved what a lot of people here are still hoping to do one day.
Wow! That sounds awesome Rob. I will want to do that some day. Are there any KPI you can share?
@Kaz M. KPI are you looking for key performance indicators? We had set criteria we were looking for, most import was cap rate, current rents, and location. The market we were looking in we set the minimum cap rate at 8%. We did not want a major rehab or renovation but we did want to find a property that the landlord was charging rents that were under competitive market rates. Location we wanted access to the major highways and not in a "D" or "C" neighborhood.
My partner and I grew up in the area where we invested so it made it easier on us finding what we were looking for.
@John Casmon suburb outside of Cleveland, OH. I have a property management company that has been doing some great work for me.
congrats bud! Happy for you