6 Unit Property Acquisition.

[Tara Kinney]

Investment Info:

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

Purchase price: $232,000

6 unit apartment building, C class neighborhood. Fully rented, below market rents. Plan to raise rents as leases come due and update apartments as current tenants move out to make units more attractive. Working with other landlords in the area to improve the quality of the neighborhood. Utilites all paid by tenants. After improvements and rents increased, should be able to increase value of the property by roughly $150K

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

Looking to scale up investments and get into more larger multifamily properties.

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

Found it on the MLS. Roof needs replacement so negotiated the cost of that off the asking price, otherwise, the numbers worked at asking price so gave him what he asked for.

How did you finance this deal?

Bank loan - 20% down (used my HELOC), 80% financed. 5 year ARM with balloon, amortized over 20 years.

How did you add value to the deal?

Upgrading units. New paint/LVP flooring, fixing cabinents - raising rents.

Lessons learned? Challenges?

Previous owners stated it was fully rented and getting all rents. Showed us their "documentation", but not sure how we "verify" that they actually are getting that other than asking for an actual bank statement. After aquiring property, looks as though one unit was trashed and abandoned. We knew it was trashed on inspection, but they assured us they were getting paid. Figured we'd fix it when they moved out...looks like we will be fixing it right away....

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

SouthEast National Bank - Brian Schubert - awesome lender. Was SHOCKED at how low my closing costs were for this property, as I just did two other properties a month prior through another lender it the prices were WAY higher for properties that were half the cost.
Mike Rebitzer - Real estate agent. This guy is outstanding. Won't steer you wrong. Will tell you if he doesn't think it's what you are looking for.