East Lake Dev - Turning Lemons into Lemonade

[Augustus Bukowski]

Investment Info:

Large multi-family (5+ units) other investment.

Purchase price: $225,000

Cash invested: $55,000

Sale price: $1,395,000

Develop a mixed use building consisting of 32 micro housing units and 2 ground floor commercial spaces.

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

This site was small, cheap, zoned for multi family and very difficult.

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

This project had been on and off the MLS and through many rounds of feasibility and development. Due to this we were able to negotiate a great price and utilize seller carried financing.

How did you finance this deal?

Because of the project complexity and lack of buyers, we were able to negotiated seller carried financing of 180 K for 12 months from our closing date.

How did you add value to the deal?

We permitted the site for a mixed use project consisting of 32 micro housing units and 2 ground floor commercial units.

What was the outcome?

Upon obtaining permits we re-evaluated our position and the rental market. We decided to take slightly lower return by selling the property as a fully permitted project, and mitigate the construction and market risk.

Lessons learned? Challenges?

Never settle, always re-evaluate strategy, choose the option with best risk reward outcome, don't just base your decision on total dollars. You must take into account the amount of money you can make today and value that versus any additional gains over the additional timeline required to complete your original objective.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?