First Multi-Family Property Just Closed!

[Marjeanne Fields]

Investment Info:

Large multi-family (5+ units) commercial investment investment in Big Spring.

Purchase price: $3,600,000
Cash invested: $1,615,000

Coronado Hills is a 68 unit, Class C Apartment building located in Big Spring, Texas. The property is currently 100% occupied and stabilized asset with several value add opportunities. The asset was originally built in 1968 and features 34 one-bedroom units, 28 large two-bedroom townhouses, and 6 large three-bedroom townhouses.

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

We love economies of scale. Actually added a second property down the street to maximize our property management fees. We love the area. Oil is hot hot hot! There are three additional large economic drivers in the area as well. Loved that it was 100% occupied with a 52 person waiting list.

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

Broker brought it to our attention. There wasnt much negotiations on price because it was listed as a 10% cap rate. This area is emerging and we are purchasing at just the right time. The seller knew what is happening in the area, and that they were selling at a very fair price. Really not much negotiations since everyone was on the same page.

How did you finance this deal?

We got a fannie mae loan. Interest only for first 2 years. Option to refi after year one. We also syndicated this deal with 21 investors.

How did you add value to the deal?

1. Increase rents to market rent
2. Add washer and dryers (hook ups available)
3. Fix fitness center
4. Fix club house
5. Add cosmetic upgrades

What was the outcome?

We just purchased. This answer is Tbd

Lessons learned? Challenges?

If you are investing in Texas, you will need a bank account opened in Texas. While you are doing due dilligence make sure you open the account.
If you are going to work with others to help raise money for the project make sure everyone is clear on what they are getting paid.
Don't hire long winded attorneys!

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

Yes. Please contact me for the following recommendations:
1. RE Atty
2. Broker
3. Lender
4. Title co