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Updated about 6 years ago,

Account Closed
  • Developer
  • Greer, SC
0
Votes |
4
Posts

Multi-family Deal Charleston, SC

Account Closed
  • Developer
  • Greer, SC
Posted

Investment Info:

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

Purchase price: $900,000
Cash invested: $950,000
Sale price: $3,300,000

Renovation of 28 unit apartment property in Charleston, SC

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

The location and the price. The market was down in Charleston, SC in 2012 and the market was severely distressed but the student housing market was under served and rents had been holding steady. The property had just been through foreclosure, was vacant and in disrepair.

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

I was able to purchase the property from my boss at the time. He had bought in foreclosure and took a deed in lieu of foreclosure. It had gone under contract twice before but did not sell so I asked him if I could buy it.

How did you finance this deal?

Conventional bank financing with LTC of 70%. I put in a third of the equity and had two other partners who each put in a third.

How did you add value to the deal?

We completely rehabbed the property and reduced the number of units by combining them to get larger units. We also demolished a building at the rear of the property to get more parking. Parking is very expensive in Charleston so to have free parking on site enabled us to push rents.

What was the outcome?

When we were about 90% complete and about 65% leased a 1031 buyer made an offer to buy the property so we sold it.

Lessons learned? Challenges?

While I had been in real estate development since 2009, I had not done a deal on my own with my own money. Having my own money really changed my mindset and made much more aware of the risks in real estate. I also learned a lot about working with partners.

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