Selling out a Class C- Apartment investment

[Arlan Potter]

Several months ago I was approached by a Realtor about the possibility of selling my apartment complex. It is a 24 unit, 6 buildings with a small laundry.  We bought it 3 years ago.  We original got a 20 year bank note along with a 5 year seller note. It has cash flowed but not much after expenses and bank payments. The second mortgage has been a real hardship.  

Anyway, we have decided to sell. Not necessarily due to tight cash flow but due to the significant amount of deferred maintenance. While paying sizable loan payments, it is very difficult to cash flow any upgrades.  In fact I think they need around an average of $20K/ per unit to make the complex into a class A or B property. Right now they are a C- or a D.  This causes the rent to be too low and the class of tenant distressing. Way too many tenant issue.

Anyway I am bailing. We will make a 250% return on my original 10% cash down payment for a 3 year investment and get a lot of cash equity that the renters paid over the last 3 years. 

A successful investment.