How to Syndicate a Distressed seller, when everything goes wrong

[Jim Biggs]

Investment Info:

Large multi-family (5+ units) other investment.

Purchase price: $8,200,000
Cash invested: $2,500,000

How to Syndicate a Distressed seller property in a hot primary market when everything goes wrong.
64 unit C Class in B neighborhood

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

64 unit C Class in B neighborhood. Syndication looking to raise ~2.5 mil. Distressed seller. $200 under market rents. $20k under $/door. Great opportunity to fix capex and aggressively push rent to market

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

Off market broker relationship

How did you finance this deal?

Large DUS lender bridge to agency package for 75% LTC and syndicate the balance

How did you add value to the deal?

We will implement a simple business plan that address' major capex flaw that has caused a poor tenant base. Then start aggressive retenant process. 64 unit C Class in B neighborhood. Syndication looking to raise ~2.5 mil. Distressed seller. $200 under market rents. $20k under $/door. Great opportunity to fix capex and aggressively push rent to market

What was the outcome?

closing scheduled 3/10/2020

Lessons learned? Challenges?

Massive challenges associated with first syndication as GP. Even though I took 5 years of study, buying SFR and smaller multi-family on my own (think 5/10 unit buildings), and 3 years as LP, KP on several large (50/130 unit) deals; I was ill prepared for what was to come.