1031 long distance BRRRR in South Carolina

[Tait Duryea]

Investment Info:

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

Purchase price: $315,000
Cash invested: $110,000

U-shaped 6 unit brick multifamily BRRRR! ...From 6 times zones away in Hawaii.

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

It was my first commercial deal and a made for a great practice run to BRRRR a multifamily.

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

This was an off market deal that I found through a broker who I was introduced to by a friend I met at the BEC conference last year. We paid the seller's asking price of $315k.

How did you finance this deal?

This was difficult. Local banks, instead of giving me a straight answer, slow no'd me over the course of a few weeks after we were under contract. By the time we were half way through our 60 day escrow, I was scrambling for financing. I ended up going through Lima One capital (who I wouldn't necessarily recommend) for a bridge loan. 2 year IO at 9.75% with 2 points.
Working on the refinance now to place more permanent debt on the property.

How did you add value to the deal?

2 of 6 units were vacant. One was rent ready, but one was gutted to the studs. We're completing a full rehab of the gutted unit, improving landscaping and stabilizing the property.

What was the outcome?

I'll let you know in a few weeks, but with only 5/6 units occupied, it's cash neutral disregarding the capital expenditures.

Lessons learned? Challenges?

Line up debt financing prior to going in.
Create a checklist for due diligence before going under contract.

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

My property manager, Will Fowler, of the Fowler company is an absolute rock star!