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Updated over 4 years ago, 05/19/2020

User Stats

4,456
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4,294
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Ben Leybovich
  • Rental Property Investor
  • Phoenix/Lima, Arizona/OH
4,294
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4,456
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CLOSED on a 98-unit TODAY!

Ben Leybovich
  • Rental Property Investor
  • Phoenix/Lima, Arizona/OH
Posted

So, we had another thread going for a couple of weeks here. And this is not yet a success story, since a lot of work needs to be done to make it a success. 

But, today, @Sam Grooms and I closed on this 98-unit in Phoenix.

This is a syndicated private placement acquisition. @Jillian Sidoti and her firm, whom I highly recommend, helped with the PPM-related docs. 

The unit mix includes studio, 1x1, 2x1, and 2x2 lay-outs. The asset was constructed in 1984, and has by and large been un-touched on the interior of the units. However, the bones are very good, the unit sizes are attractive within the sub-market, and the location is experiencing very significant gentrification.

This was a mom-an-pop owned property. Rents are low even for as-is condition. Our Cap Rate on the way in is a bit under 5%. Our expected Cap Rate after the re-positioning in Y3 is 8.3%. Obviously we feel that there is a lot of upside on the rents. 

We have a $1.4M renovation budget, which includes complete reno of the interiors, as well as close to $500,000 in the common areas.

I could talk for hours, but I won't. I have a feeling me talking for hours might happen on the blog :) 

But, feel free to ask questions - I won't tell you everything, but I'll do my best to paint the bug picture.

User Stats

62
Posts
37
Votes
Mike Montana
  • Investor
  • Indianapolis, IN
37
Votes |
62
Posts
Mike Montana
  • Investor
  • Indianapolis, IN
Replied

Congrats to you guys. In a market like we’re in this sure sounds like a real nice deal. Best of luck to you in the implementation of the business plan.

User Stats

68
Posts
24
Votes
Jon Sidoti
Pro Member
  • Investor
  • Quincy, MA
24
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68
Posts
Jon Sidoti
Pro Member
  • Investor
  • Quincy, MA
Replied

Congratulations!!! Best of luck with the new property!

  • Jon Sidoti
  • Rent To Retirement logo
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    User Stats

    243
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    66
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    Tzvi Ausubel
    Pro Member
    • Rental Property Investor
    • New York City, NY
    66
    Votes |
    243
    Posts
    Tzvi Ausubel
    Pro Member
    • Rental Property Investor
    • New York City, NY
    Replied

    @Ben Leybovich @Sam Grooms congrats on the deal!

  • Tzvi Ausubel
  • User Stats

    82
    Posts
    136
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    Ian Stuart
    • Lender
    • Seattle, WA
    136
    Votes |
    82
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    Ian Stuart
    • Lender
    • Seattle, WA
    Replied

    @Ben Leybovich @Sam Grooms Congrats you guys!!!

    User Stats

    20
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    9
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    Demetrius Hargrove
    • Teaneck, NJ
    9
    Votes |
    20
    Posts
    Demetrius Hargrove
    • Teaneck, NJ
    Replied
    @Ben Leybovich Congratz..good job on the close

    User Stats

    42
    Posts
    39
    Votes
    Ashley Davis
    • Real Estate Agent
    • Miami
    39
    Votes |
    42
    Posts
    Ashley Davis
    • Real Estate Agent
    • Miami
    Replied

    WOW congrats! #GOALS

    User Stats

    7
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    4
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    Holden Bouwers
    • Investor
    • Indianapolis, IN
    4
    Votes |
    7
    Posts
    Holden Bouwers
    • Investor
    • Indianapolis, IN
    Replied

    Congrats!

    User Stats

    5
    Posts
    3
    Votes
    Mace Smallwood
    • Piscataway, NJ
    3
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    5
    Posts
    Mace Smallwood
    • Piscataway, NJ
    Replied

    Awesome! Inspirational!

    User Stats

    108
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    49
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    Aaron R.
    • Investor
    • Phoenix, AZ
    49
    Votes |
    108
    Posts
    Aaron R.
    • Investor
    • Phoenix, AZ
    Replied

    @Ben Leybovich @Sam Grooms You mentioned the seller was not very sophisticated. He bought the property for 1.645M in 07/2013 and sold it to you guys for 8.15M 5 years later. 500% increase for an unsophisticated seller is pretty good. 

    User Stats

    4,456
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    4,294
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    Ben Leybovich
    • Rental Property Investor
    • Phoenix/Lima, Arizona/OH
    4,294
    Votes |
    4,456
    Posts
    Ben Leybovich
    • Rental Property Investor
    • Phoenix/Lima, Arizona/OH
    Replied
    Originally posted by @Aaron R.:

    @Ben Leybovich @Sam Grooms You mentioned the seller was not very sophisticated. He bought the property for 1.645M in 07/2013 and sold it to you guys for 8.15M 5 years later. 500% increase for an unsophisticated seller is pretty good. 

     He bought the property for $2.9M in 2013. But, yes, I disagreed with Sam's assessment of "not sophisticated. You can't argue with success.

    I will say that he may not have been the most sophisticated seller, but on the other hand - he did not need to be. He did well enough on the front end. And while we can term someone as not sophisticated to do what we do, the reality is that he was plenty sophisticated to call the cap rate compression game, and had the balls to deploy when many did not.

    Bottom line, I agree with you - @Sam Grooms should not have characterized the seller this way.

    User Stats

    583
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    918
    Votes
    Sam Grooms
    Pro Member
    • Investor
    • Phoenix, AZ
    918
    Votes |
    583
    Posts
    Sam Grooms
    Pro Member
    • Investor
    • Phoenix, AZ
    Replied

    I'd argue that its 10x harder to build value now, than in 2013. How could you not build value by buying in 2013?

    If the seller was given the property today for free, and you told him he could have any increase in value on the property over the next three years, I don't think he'd change a thing. 

    When I said he was not sophisticated, I meant in the sense that I don't think he could do what it takes to build value in today's market. That's not an insult. I'd happily switch places with him. Hats off to him for the tremendous gain he just realized. 

    User Stats

    6
    Posts
    5
    Votes
    Aubrey Lambalot
    • Acushnet, MA
    5
    Votes |
    6
    Posts
    Aubrey Lambalot
    • Acushnet, MA
    Replied

    Congrats!

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    User Stats

    4
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    2
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    Replied
    @Ben Leybovich Amazing! Congratulations. That is one of my goals 150-200 unit. I have a lot to learn. Currently active military, so try to get debt paid for and put together $25k or so to get my first multi family or 2 singles here in AZ BEFORE I have to move again. Again, great work and a great example for the rest of us. Thank you for sharing your experience.

    User Stats

    4,456
    Posts
    4,294
    Votes
    Ben Leybovich
    • Rental Property Investor
    • Phoenix/Lima, Arizona/OH
    4,294
    Votes |
    4,456
    Posts
    Ben Leybovich
    • Rental Property Investor
    • Phoenix/Lima, Arizona/OH
    Replied
    Originally posted by @Sam Grooms:

    I'd argue that its 10x harder to build value now, than in 2013. How could you not build value by buying in 2013?

    If the seller was given the property today for free, and you told him he could have any increase in value on the property over the next three years, I don't think he'd change a thing. 

    When I said he was not sophisticated, I meant in the sense that I don't think he could do what it takes to build value in today's market. That's not an insult. I'd happily switch places with him. Hats off to him for the tremendous gain he just realized. 

    Haha you can argue, but you would lose. It is harder to build value, of course, it is. And yet - he was the smart one to get in when he did - we are the schmucks having to do the heavy lifting. Wouldn't you rather be him? And isn't part of the reason we are doing what we are doing so that in the next cycle we can indeed be him?! 

    User Stats

    4,456
    Posts
    4,294
    Votes
    Ben Leybovich
    • Rental Property Investor
    • Phoenix/Lima, Arizona/OH
    4,294
    Votes |
    4,456
    Posts
    Ben Leybovich
    • Rental Property Investor
    • Phoenix/Lima, Arizona/OH
    Replied
    Originally posted by @Ramon Grullon:
    @Ben Leybovich Amazing! Congratulations. That is one of my goals 150-200 unit. I have a lot to learn. Currently active military, so try to get debt paid for and put together $25k or so to get my first multi family or 2 singles here in AZ BEFORE I have to move again. Again, great work and a great example for the rest of us. Thank you for sharing your experience.

     Thank you for your service, Ramon! And - baby steps...

    User Stats

    109
    Posts
    31
    Votes
    Obi I.
    • Rental Property Investor
    • Baltimore, MD
    31
    Votes |
    109
    Posts
    Obi I.
    • Rental Property Investor
    • Baltimore, MD
    Replied

    @Ben Leybovich and @Sam Grooms. Thanks for sharing your experience in taking down this 98 unit deal. Very helpful to those of us with similar aspirations for the future. Thanks for taking high road and focusing on the big picture in the process.  

    User Stats

    4,456
    Posts
    4,294
    Votes
    Ben Leybovich
    • Rental Property Investor
    • Phoenix/Lima, Arizona/OH
    4,294
    Votes |
    4,456
    Posts
    Ben Leybovich
    • Rental Property Investor
    • Phoenix/Lima, Arizona/OH
    Replied
    Originally posted by @Obi I.:

    @Ben Leybovich and @Sam Grooms. Thanks for sharing your experience in taking down this 98 unit deal. Very helpful to those of us with similar aspirations for the future. Thanks for taking high road and focusing on the big picture in the process.  

    It is our pleasure to help, Obinna!

    And, @Sam Grooms - note how people enjoy the high road, big picture, broad strokes...Ben Leybovich's liberal arts approach to teaching :)

    User Stats

    583
    Posts
    918
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    Sam Grooms
    Pro Member
    • Investor
    • Phoenix, AZ
    918
    Votes |
    583
    Posts
    Sam Grooms
    Pro Member
    • Investor
    • Phoenix, AZ
    Replied
    Originally posted by @Ben Leybovich:
    Originally posted by @Sam Grooms:

    I'd argue that its 10x harder to build value now, than in 2013. How could you not build value by buying in 2013?

    If the seller was given the property today for free, and you told him he could have any increase in value on the property over the next three years, I don't think he'd change a thing. 

    When I said he was not sophisticated, I meant in the sense that I don't think he could do what it takes to build value in today's market. That's not an insult. I'd happily switch places with him. Hats off to him for the tremendous gain he just realized. 

    Haha you can argue, but you would lose. It is harder to build value, of course, it is. And yet - he was the smart one to get in when he did - we are the schmucks having to do the heavy lifting. Wouldn't you rather be him? And isn't part of the reason we are doing what we are doing so that in the next cycle we can indeed be him?! 

     I get the sense you didn't read my entire post :)

    User Stats

    1,071
    Posts
    268
    Votes
    Melissa Gittens
    • Real Estate Broker
    • Windsor, CT
    268
    Votes |
    1,071
    Posts
    Melissa Gittens
    • Real Estate Broker
    • Windsor, CT
    Replied

    That is so awesome!! Ccongratulations!

    User Stats

    4,456
    Posts
    4,294
    Votes
    Ben Leybovich
    • Rental Property Investor
    • Phoenix/Lima, Arizona/OH
    4,294
    Votes |
    4,456
    Posts
    Ben Leybovich
    • Rental Property Investor
    • Phoenix/Lima, Arizona/OH
    Replied
    Originally posted by @Obi I.:

    @Ben Leybovich and @Sam Grooms. Thanks for sharing your experience in taking down this 98 unit deal. Very helpful to those of us with similar aspirations for the future. Thanks for taking high road and focusing on the big picture in the process.  

    It is our pleasure to help, Obinna!

    And, @Sam Grooms - note how people enjoy the high road, big picture, broad strokes...Ben Leybovich's liberal arts approach to teaching :)

    But, guys - Sam just yelled at me to fully read his comments before arguing... Sam is still having trouble coming around to the reality that I am always right lol

    User Stats

    2
    Posts
    2
    Votes
    Noah Ryan
    • Rental Property Investor
    • Baltimore, MD
    2
    Votes |
    2
    Posts
    Noah Ryan
    • Rental Property Investor
    • Baltimore, MD
    Replied
    @Ben Leybovich Congratulations man! Big close! Big deal! Hopefully big profits for you & your team! Phoenix is a great market.

    User Stats

    28
    Posts
    5
    Votes
    Tyrell Townsend
    • Chicago, IL
    5
    Votes |
    28
    Posts
    Tyrell Townsend
    • Chicago, IL
    Replied
    Aw man that's great congrats!!!!
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    User Stats

    4,456
    Posts
    4,294
    Votes
    Ben Leybovich
    • Rental Property Investor
    • Phoenix/Lima, Arizona/OH
    4,294
    Votes |
    4,456
    Posts
    Ben Leybovich
    • Rental Property Investor
    • Phoenix/Lima, Arizona/OH
    Replied
    Originally posted by @Noah Ryan:
    @Ben Leybovich Congratulations man! Big close! Big deal! Hopefully big profits for you & your team! Phoenix is a great market.

    Noah - I love Phoenix too. And when I say this, I mean I love living here.

    I've always been a gut buyer. Yes, the numbers have to make sense, but I don't ever want the very difficult job of selling to people something they don't want. So, the question I ask is always - will they like it? 

    The thing is - I am not so different from most people I'd want to work with. All of us more or less want the same things in life. This means, we like the same things in life. So - if I like it, other people will likely like it too!

    I like Phoenix. I like this asset. The location, grounds, mechanical set-up - I like it. So - they'll probably like it too... That's why I bought it!

    User Stats

    2
    Posts
    1
    Votes
    Replied

    This is very exciting. I'm just starting out in RE and am interested in the whole aspect of syndications, finding deals, and getting a group together.

    I am just about to finish college and am wondering... what is the best way to start towards this kind of process?

    I am not saying in reference to lock up deal like this (although a dream!) but, how can one start the foundation to get to where you guys are?

    I am currently starting to familiarize myself with vocab and their importance in RE. What would you say are some steps someone beginner can take.

    Thank you both and awesome property!

    User Stats

    41
    Posts
    23
    Votes
    Stephen Jeffers
    • Real Estate Agent
    • Indianapolis, IN
    23
    Votes |
    41
    Posts
    Stephen Jeffers
    • Real Estate Agent
    • Indianapolis, IN
    Replied
    @Ben Leybovich this was the moment when I was alerted by the forum that I couldn’t upvote the same person more than five times a day. Lol. Congratulations on the deal, I don’t understand all the concepts...yet.