12 unit property less than 7% down with bank financing!

[Jonathan Bombaci]

Investment Info:

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

Purchase price: $380,000
Cash invested: $20,000

Attention Investors!! Don't miss this 12 unit apartment building within walking distance to Littleton's popular downtown. Fully rented with good rents! The property consists of two buildings with 8 units in the front building and 4 units in the building to the rear. The .27+/- acre lot allows for ample on site parking. 12 units + Fully rented + Good rents + close to downtown and highways = MUST SEE!

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

It was close to main street in the town my wife and I have been investing/looking to continue to invest in.

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

A local broker brought it to us, it was an off market deal that they wanted to get $350,000 for. I know the area pretty well and knew it would appraise for more so we did an offer of $410,000 with $60,000 back at closing to be used for updates. We found some significant inspection items (ALWAYS bring an electrician and plumber with you to the inspection), and got $30,000 off the purchase price. Reducing it to $380,000 with $60,000 coming back to us a closing for a net price of $320,000.

How did you finance this deal?

I have a good relationship with a local credit union that does commercial loans based on Loan To Value (LTV). The property appraised at $405,000 so they had no problem lending to us on the $380,000 at 5.5% for a 25 year mortgage. The knew we were getting the $60,000 back at closing but since it appraised so high it met their underwriting guidelines. We ended up having to bring less than $20,000 to closing and received a check for over $5000 at closing which was the security deposits.

How did you add value to the deal?

we knew the area and knew what the seller wanted so we were able to come up with a win/win scenario

What was the outcome?

We closed on the property and currently managing it

Lessons learned? Challenges?

We found some significant inspection items. When buying something this big and this old I would strongly recommend bringing a licensed electrician and plumber to the inspection. The two of them found enough things to get the seller to reduce the price by $30,000.