First Multi-Family Investment is Large 49-unit Apartment Complex!

[Jeffrey D. Kent]

Investment Info:

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

Purchase price: $900,000
Cash invested: $300,000

A 49-unit apartment complex in a working class neighborhood with huge value add potential in rehab and rent.

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

This complex was going to make a great Cash on Cash return of nearly 20% from close, and shows huge potential to bring greater returns after we complete rehab.

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

We were able to purchase the property for significantly less than the asking price, which gave us an immediate and significant positive cashflow from closing of escrow.

How did you finance this deal?

Hawthorne Bank, which specializes in lending in the area, has been exceptional to work with. We were able to fin cane the property and include the costs of rehab int he loan!

How did you add value to the deal?

This property was at 85% occupancy, but was not being properly maintained or managed. The property is currently being rehabbed at a rate of 5 units at a time. The units are being gutted, and completely rehabbed. Additional value adds will be by rehabbing the laundry room, offering vending machines for supplies and snacks, and trading an onsite management office to the property management company in exchange for a reduced management fee.

What was the outcome?

The property closed without issue and is currently cash flowing. The rehab process is currently ongoing.

Lessons learned? Challenges?

Take your time to find the right property, lender and partners, and wonderful things will begin to happen!