5 unit brick apt building in the mid-west

[Sibley L. Poland]

Investment Info:

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

Purchase price: $233,000
Cash invested: $10,000

My first large multi-family purchase after starting with 2 single fam flips, 2 single fam long-term holds, 2 duplexes (long term holds). This is a 5 unit brick apt building with positive cash flow and I was able to use the equity from my existing properties to reduce the cash out of pocket needed to close this deal. Units are fully rented and rent well to long-term tenants.

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

The slow , steady predictability of the quintessential mid-western small town make these units easy to rent and to typically a long-term tenant, low turnover. The unit is all brick, brand new roof and 4 out of 5 units have been completely remodeled in the past 5 years, roof is les than 5 years old, all electric head (no furnaces!!!) Very low maintenance building.

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

It was listed in the MLS for close to 280K and the DOM was several months long. I watched it until it dropped to 249K then was able to negotiate a purchase price of 233K with seller paid CC.

How did you finance this deal?

Using existing equity from my other rentals which greatly reduce my cash out of pocket. I use a traditional bricks and mortar local bank for all my investments.

How did you add value to the deal?

All of these units are under-rented. As attrition takes place, I will will increase rents over time.

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

I am a real estate agent.