8 Unit Multifamily - Fully Occupied

[Zane Belden]

Investment Info:

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

Purchase price: $160,000
Cash invested: $30,000

Contributors:
Devin Haertling

8 Unit, all 1 bed, 1 bath, fully occupied.
Fully renovated 1 unit and consistently raising rents.

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

Good purchase price. Convenient management. Low risk/cap ex exposure. Cashflow.

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

Agent/Property Manager. Analyzed the investment with BP calculator and made offer that would allow the property to have solid cashflow at modest rents with plans to raise rents.

How did you finance this deal?

Conventional, 20 year mortgage.

How did you add value to the deal?

Cleaned the units and fully rehabbed the units. Also by being responsive to tenants needs and repair/maintenance issues.

What was the outcome?

So far good. Property is fully occupied and stabilized.

Lessons learned? Challenges?

We purchased it fully vacant so it took about 6 months to get it rolling, so patience. Also, the better tenants you get, the better other tenant you get.

[Devin Haertling]

@Mark Christopher Javier

This is in Mt Vernon IL.  Population is 15K.  It sits straight east of St Louis MO by about 80 miles.

We did not have any units in Mt Vernon prior to this.  I had called a realtor to look at another deal outside of Mt. Vernon (I noticed he had a lot of commercial residential property listed in southern Illinois).  That deal did not work out but the realtor that showed us the property is our current PM.  He does commercial residential real estate and also has a PM company.  After the first place he showed us didn't work out I explained to him what we were looking for and from there things took off.  In a different town but using the same realtor/PM we now also have a 24 unit under contract to close in March and last week signed a contract on 8 units in another town.   

10% down for financing:

Coming into this deal I had already purchased 7 single family rentals without Zane.  We used the same bank to purchase the 8 unit complex.  They let us bridge the equity I had in my single family rentals to the 8 plex thus only needing to put down 10%.