1 more 2-pack for the Portfolio.

[Will Fraser]

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Oklahoma City.

Purchase price: $209,218
Cash invested: $37,298

This is one of 5 duplexes purchased from a seller looking to cash out of real estate. You learn so much about the operator of a portfolio during the underwriting and due diligence process and we were fortunate to be dealing with people of integrity and skill on this one!

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

Though I serve the whole OKC metro I personally focus on one area and I had been watching this duplex for a while. It was put on the market with one shoddy picture and no real details (except that it would be annoying to show), so I ignored it. 3.5 months later I noticed that the picture changed and so did the description, so I had to jump on it!

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

I made an offer on this duplex packaged with 4 others that the seller owned and sent a video to the agent in which I walked through the details of the offer and HOW I got the offer number.

How did you finance this deal?

Partnerships and my stellar local bank :)

How did you add value to the deal?

Value was added by solving a problem for the seller -- they wanted to cash out of real estate to attend to some health issues and were anxious about the process being convoluted or complex. So . . . we made it nice and simple . . . "at X price here is what we can do" and then we did it.

What was the outcome?

We bought this at 75 cents on the dollar, so on the day of closing we "bought" a 25 cent return for each dollar deployed, not to mention cashflow along the way. Factoring in the down payment amount the total debt position on day one was 61%, making this a comfortable deal for the bank and a winning one for the partners!

Lessons learned? Challenges?

Having brokered a number of portfolio sales it is now crystal clear that the greatest measure of a person, company, or tribe of people is integrity. These seller/operators were skillful, caring, and honest and the entire process was lighter and easier because of it -- for BOTH parties! Contrasting this to the past portfolio sale with shady sellers who were negligent in operations highlights this critical factor.

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

Wesley Anderson and the whole staff at Valor Bank in Edmond were rockstars!