Second deal in Columbus!

[Ki Lee]

Investment Info:

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

Purchase price: $1,410,000
Cash invested: $364,555

Contributors:
Austin Steed, Jake Fugman, Trey Golston, Jeff Tyndall, Remington Lyman, Bryan Pham, Brandon Sturgill, Alina Trigub, Mitch Provost, Michael Ealy, Dave Foster

My partner and I closed on a 36 unit deal in North part of Columbus two weeks prior, and successfully closed on these 24 units. They are 2/2 condo units out of 300+ unit complex, managed by onsite management company.
The complex was built in 1998, the units and the mechanicals were in good shape. It was a turn-key deal where we didn't have to invest in any improvements or deferred maintenance. I would categorized the area as C+/B-.
The current plan is a long term hold for cashflow.

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

It was a turn key portfolio with nice cash flow with potential for big upside due to significant development in the area. The units and the mechanicals were in good shape, the financials were strong, and the property enjoyed very low vacancy with a solid onsite management in place.

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

Our broker brought this to us off-market. We negotiated about 10% from the original asking price.

How did you finance this deal?

Local bank, portfolio loan. 75% LTV, 4% interest, 10 year term, 5year fixed, 25 year amortization, full recourse. 2% prepayment payment if we refinance with another lender, otherwise no prepayment penalty.

How did you add value to the deal?

It's a turn key property. There is some room for rent growth, but its slow and steady. We have plans for potential STR or corporate housing.

What was the outcome?

This is a new acquisition.

Lessons learned? Challenges?

Doing 1031 with a partner can be tricky. The LLCs and the ownership structure has to be facilitated properly. We did TIC (tenants in common) with single-member disregarded LLCs where we were able to close in our respective LLC's but since it flows down to our individual tax, the 1031 requirements were satisfied.

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

Dave Foster for 1031 exchnage, Bernie McGuiness from FC Bank for loan.

There were also many people that I met on BP who helped me navigate many questions and provided support/encouragement along the way -

@Mike Ealy,@Steve Rozenberg, @Bryan Pham, @Brandon Sturgill, @Remington Lyman, @Jeff Tyndall, @Austin Steed, @Alina Trigub, and many more