Fixer apartment purchase in up-and-coming area
Investment Info:
Large multi-family (5+ units) buy & hold investment in Portland.
Purchase price: $314,000
Cash invested: $62,800
Fixer apartment purchase in up-and-coming part of N/NE Portland.
What made you interested in investing in this type of deal?
The price per door seemed like too much of a bargain to pass up.
How did you find this deal and how did you negotiate it?
The property was listed in MLS. The seller was a non-profit who'd pretty much run the building into the ground. They were looking for a cash buyer, but the seller was willing to let us try to find financing.
How did you finance this deal?
We convinced a local bank to give us an 80% commercial loan so long as we put adequate funds to make the (many) repairs the building needed into escrow with them.
How did you add value to the deal?
At first we thought we'd remodel a couple of units and then do the rest one-by-one, but as we got into the project, we realized that we needed to touch nearly every surface and redo the electrical service, so we forged ahead with cosmetic updates to all the units.
What was the outcome?
The neighborhood was pretty rough at the time, so we had a tough time finding tenants at first. After a few years, the area improved (rapidly) and we have enjoyed positive cash flow, even after refinancing to a 15 year loan.