52 unit portfolio in Saginaw, MI

[Duc Ong]

Investment Info:

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

Purchase price: $1,434,000
Cash invested: $267,546

Contributors:
Vince Gethings

These 44 units are spread out between 32 units at Country Squire and 12 units at Southfield Village, in the working class area of Bridgeport Township, just outside Saginaw, MI. We cross collateralized into this loan using the equity from the 8 units at Haven Oaks to assemble a 52 unit portfolio in the area.

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

The price per door was in the $27K range, and the potential for RUBS and decreasing the operational expenses with new management.

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

Through a local broker. My partner found and we negotiated it to close in 2 phases, acquiring the 8 units with cash and then the remaining 44 units using a local bank.

How did you finance this deal?

Local community bank

How did you add value to the deal?

Decrease operational expenses, bill back utilities to tenants, turn the units as tenants vacate and push rents up slightly.

What was the outcome?

Since we just acquired this, we are working on stabilizing it.

Lessons learned? Challenges?

Some balls were dropped during the closing process in terms of communication with title and the lender. If I could do it over again, I would be a lot more vigilant and manage the process more, to ensure that everyone was on the same page.

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

Time will tell how our PM performs.