5 Family in Nothern NH -

[Jonathan Bombaci]

Investment Info:

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

Purchase price: $220,500
Cash invested: $30,833

Off-Market deal that I found by e-mailing people with open apartments on Craigslist. negotiated cash back at closing to reduce my downpayment. 5 family near the town center. Vinly sided, in pretty good shape other than some neglected routine maintance from previous owner. Biggest issue with property is that the heat and hot water are included in rents..

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

Was looking for something larger than a 4 unit to try to build some scale

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

Found this on Craigslist when the owner posted an open apartment. I negotiated it as $220,500 with $12,000 back at closing to deal with some routine maintenance then during diligence and inspection found some other thing and was able to increase that to $20,500 back at closing.

How did you finance this deal?

Financed through my local credit unit on a commercial loan which was set at 80% LTV (Loan to Value). Since the appraisal came in at $225,000 and it was a commercial loan through my local credit unit I was able to use the $20,500 negotiated above towards the downpayment and reduce the cash i had to put into the property. Now I can use the cashflow to make the needed repairs before the winter months.

How did you add value to the deal?

Rents were undervalued so immediately increased rents by $50- $100 per unit. I had the heating system cleaned and serviced and will be replacing the single heating system before the winter with a system that can be separately metered so Tenants will be paying their own heat in the near future.

What was the outcome?

So far so good but only a few months into ownership and dealing with turnover in 1 of the 5 units.

Lessons learned? Challenges?

When dealing with problem tenants make sure paperwork is perfect and involve a lawyer when needed. I probably over used/overpaid my lawyer in this case but better safe than sorry when it comes to tenant law.

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

I am a real estate agent and we did this deal off Market. If looking at commercial loans I'd recommend calling some local credit unions. I called 3 and 2 of the 3 were more than willing to underwrite the properties I was looking at.