We purchased a 12 unit apartment building in one of the fastest trending areas of Lexington, the NOLI district. Financed at 80% the other 20% ($140K) came from HELOC's on past deals essentially putting us in at no money down. Current rents are about $550 on average, and with a ~$10K/unit reno to each we expect to pump rents up to market around $700-750. This will be a slow deal (12-18 Months) as we wait for units to turn over to renovate them, but with the additional income, barring local cap rates (~7%) stay similar to what they are now or get better, we plan to refinance our purchase and reno capital out, while holding onto a $3,500+/month cash flowing asset in a ever increasing trendy area..

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

When evaluating our other properties, it became very clear that our multi family properties were our most profitable, month after month. So we are changing our investing style accordingly.

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

We found this deal by following up on a social media lead through the owners previous agent. This was completely off market and the owner had actually only discussed selling it in passing months prior.

How did you finance this deal?

Conventional 80% financing. 5/5/5 ARM. Financed the DP with HELOC's from prior deals.

How did you add value to the deal?

Currently in the process of adding value to these 1 Bed / 1 Bath units. New bathrooms, Kitchens, floors, and new windows would allow us to increase the rent to market if not a little above.

What was the outcome?

Still in process.

Lessons learned? Challenges?

Moving into the larger multifamily space there have been a few learning moments. Working with the city on Dumpster permitting and servicing was a new and overlooked one, as well as our potential to need a new main drain for the 60 YO building. One thing we didn't know prior to the purchase was that tenants on the first floor had previously suffered from sewage backups. A new main drain is fairly expensive and was an overlooked expense.

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

As an agent myself, I am constantly on the lookout for good deals for myself and others. Not having my ear to the ground like I did, I more than likely would not have been able to secure it. Financing was through Park Community Credit Union out of Louisville, KY. We established a relationship with them on a previous deal and it couldn't have been easier this time around!

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12 Unit Apartment Building in the NOLI district of Lexington, KY

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