From Small MF to large scale BRRR!

[Kirk Calhoon]

Investment Info:

Large multi-family (5+ units) commercial investment investment in Lawrence.

Purchase price: $1,000,000
Cash invested: $7,500

Made my largest MF purchase to date using partner funds and my own cash. This is a large scale BRRR project. We are currently rehabbing interior units and bidding out exterior cosmetics. This is a true "Work in Progress" and will have more details and learnings as time presses on!

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

I have always wanted to scale the amount of units I own but buy for the right price. I went outside of my metro area to a nearby college town to do so. The market dynamics are different and rental cycles are different however cap rates are very similar so I felt really comfortable with the purchase.

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

I actually found it on the MLS believe it or not! Owner's just had the last deal fall through and I promised to move quickly. I made good on my promises and closed in January.

How did you finance this deal?

I used partner funds, my cash and a community bank for short term monies and rehab costs. Plan to move to agency debt once re-evaluated and stabilized.

How did you add value to the deal?

That is a "work in progress" but we are rehabbing all units and exterior to bring it up to date and raise rents throughout. MF valuation is based off NOI and cap rates. Once you know that info, it's up to you to add value accordingly.

What was the outcome?

TBD

Lessons learned? Challenges?

A continued lesson on all of my deals is that you have to explore all options on construction. EG. Don't spend too much! I always want my units to be top notch, but it's not realistic to make sure you return your capital.

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

Cindy Nielson with Reese and Nichols did a great job helping me close this and battled with me through and through!