Major fixer Cully 12 plex

[Julee Felsman]

Investment Info:

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

Purchase price: $695,000
Cash invested: $139,000

12 plex in Cully. Major (major) fixer.

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

We felt that 5-20 unit properties were under-valued and were keeping our eye out for candidates to buy in areas with up-side. This one was in Cully and very much fit the bill.

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

It was listed in MLS. The seller needed to sell one of two properties and didn't accept our initial offer. He came back to us, through our agent, when the sale of another property he had listed fell through.

How did you finance this deal?

20% down commercial loan, 10 year amortization. We sold the bank on our prior experience buying fixers and convinced them we could take on this larger project.

How did you add value to the deal?

Gut remodel of all 12 units... and landscaping. There is not a surface we didn't touch.

What was the outcome?

Great cash-flow property. It was going to be our last purchase... until it wasn't.

Lessons learned? Challenges?

So many lessons. This was quite a project. One takeaway: Don't try to use a shipping container as an outbuilding in the city of Portland. We spent a lot of time and money and finally got the message... they were never going to give us a permit to do what we wanted to do (but they were never going to say 'no' either).