closed my first commercial deal on a 8 unit

[Vincent Gable]

Hello everyone, i havent been very active on the forums because i've been working to close my first commercial deal. I guess i'll start off talking about where i was and move into talking about this new deal. I found bigger pockets about 6 months ago and wanted to start learning more about real estate. i already owned a few SFR rentals that were doing alright but i wanted to expand my portfolio. So because i had lived in my mothers old home 2 out of 5 years, my CPA and realtors told me this would be a great time to sell that property and not be liable for capital gains on it. So i sold that place to get the capital together to move forward. I might be getting a bit ahead of myself because during the summer i was reading the books DP offers in the book store, listening to podcasts, and working part time at a friends contracting company. So as i went through the process of selling the home, i spent most of my time reading books, participating in the forums, watching youtube videos, and listening to podcasts.

So once we moved into the fall and i progressed into contract on my home sale, i had built my baseline knowledge around real estate. I feel like bolstering my knowledge and taking time to learn about the strategies is the number one thing that prepared me for finding a deal. As i looked over several deals on the MLS i also reached out to the 3-4 realtors i know and told them what i wanted to accomplish. I made sure they knew i was working with other realtors and that who ever brought me the best deal is the person i was going to work with. They all knew i was in contract and that i would have cash to buy my next deal. this meant for them a guaranteed commission as long as they could present me with a reasonable property.

a weeks went by of me visiting properties and analyzing deals before one of the realtors got back with me in an email. She told me that she saw this building in the next city over and although it wasnt in my area it was worth taking a look at. Well i analyzed the deal and nearly fell out the chair. the MLS listing claims the property is producing over 30k a year in net profits. and they were only asking 285k for the property. I reached back out and asked my realtor to reach out and double check the numbers because it didnt seem like that was possible. Well after talking with the sellers realtor and confirming the numbers i asked to come see the building.

I got there and the building is in fantastic shape, and even had more then 70% of the building had recent rehab and brought up to date with LVP floors and paint. I ask the owners to tell me about the rents and as im writing down the rents of each unit and doing the math, they were actually understating the income the apartments were making. then since they lived at the property they had not even counted the future income from renting their own apt out which had the best updates since they lived there. They let me know that someone else had come to see the property and they were going to be reviewing best and highest that evening. me and the realtor made it 2 blocks before we pulled over and submitted an offer of asking price with the contingency to give all current tenants a chance to sign a year lease so that no one would be forced to move and noone would be forced out due to rent increase for the first year. 

well the next day we found out they accepted the offer but my next challenge was in the way..... financing. So i had not ever tried to talk to commercial lenders because all my previous deals were SFR. I mentioned that i had been reading the BP books and during the previous weeks i had followed Mr. Greene's advice about meeting with lenders and having questions prepared about loans, as well as all my financials in a file i could send out to anyone anytime. well after all those meetings i ended up building some relationships with people who liked me and my story. they wanted to see me expand and get to the next level, so i had a few commercial referrals. well after talking to lenders till i was blue in the fact, i still had no lender committed and i was days away from my deadline in the contract. The sellers realtor reached out asking what was going on and i told them i was still working on it but please be patient i have the cash for the down, i just need to meet the right lender. I talked to the rest of my realtors and they connected me with a hard money lender who was willing to do the deal. But after looking at the rates i was still a little weary so i did a last ditch hail mary, i asked facebook. Because i was working at the contracting company doing marketing they asked me to join all the local real estate groups to try to promote the contracting business. Well i just posted in those groups that i needed a commercial lender and i was about to loose a deal. I had 3 people tell me to message them, 2 people respond, and 1 of them set up a meeting.
Well to get on with the story, the meeting went good and we got the deal approved. Because this deal was more then 5+ doors its viewed as a commercial loan that is based on the asset itself and less on me the borrower. So i went back to the sellers realtor with my financing in place and we made it through inspections and valuation. 
As of November i went from a beginner investor with a handful of single families to a legitimate real estate investment company with 11 units in 2 counties. It was like i went from a guy who was just flying by the seat of his pants to an educated investor who was starting to see his portfolio truly grow. (idk how many units makes you official, but 11 sounds good when i say it ;)lol  ) 

I've had a few hiccups and growing pains as i've transitioned to this new level. This is in addition to the fact that im currently in the process of BRRRR'ing my other properties to pull my initial investment back out and continue my journey. I am very excited about diversifying my investment because it allows me to learn more about the commercial niche, allows me to have a greater control on the investment because its much simpler to increase the NOI of an apartment building then a SFR. I would say that anyone who has made participating in this site, through the forums or bookstore, a habit; has the ability to do the same thing i just did.

I believe that my success can be attributed to a mix of the education i found on BP and my own tenacity to succeed at things i put my mind to. But no matter how much you want change, if your unwilling to educate yourself to the point you can viably succeed, you will find change difficult.

 If you guys have any questions about the deal or how i overcame challenges then please respond or reach out. im no guru and im no expert, im a guy similar to you who picked up a few books and watched literally <10 youtube videos. it might sound like im ********ting you but i promise its true and if you knew my entire story you would be in more disbelief. I just wanted to share this success story to motivate the next person. YOU CAN DO IT, if i can , YOU CAN.

Vincent