18-unit C Class Value Add Apartment Deal

[Rich Jordan]

Investment Info:

Large multi-family (5+ units) commercial investment investment in North Carolina.

Purchase price: $500,000
Cash invested: $150,000

18 Unit C-Class Apartment Building (purchased in November 2018)

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

Below market rents, poor management, 83% occupancy, good location.

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

Loopnet. Submitted two separate LOIs - one with a lower offer, the other with higher offer but more favorable buyer terms. Higher offer made it to best and final and was ultimately accepted.

How did you finance this deal?

Conventional commercial financing through Regional Bank. Bit of a pain-in-the-neck to work with, but we were able to get it done with favorable terms.

How did you add value to the deal?

Removed on-site property manager and implemented professional 3rd party management (at lower cost). Filled vacancies (now operating between 95-100% occupancy). Bringing rents to market rate as leases renew and tenants turnover - in just 4 months of ownership we've been able to increase gross income by 34% (!!!).