28 Unit Apartment Complex Value Add deal

[Ron Seay]

Investment Info:

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

Purchase price: $1,350,000
Cash invested: $690,000

28 Unit Apartment Complex, all three bedrooms two bath units with washer/dryer connnections.

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

I own other multifamily in Austin and this was a deal with my mentee Jeff Chaparro. Jeff was going to syndicate the deal but I decided it was such a good deal that I would invest the remaining funds.

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

This deal was listed on loopnet, but the seller was in distress and needed a guaranteed close.

How did you finance this deal?

Local lender provided us with acquisition financing and included 400K in rehab money, with an additional 200K of leverage available to us if we deposited a 200K CD with the bank.

How did you add value to the deal?

Rehab, Re-renting, raising rents, billing back utilities

What was the outcome?

This asset is listed for sale for 3 million today, but COVID19 is making the financing for any new buyers difficult.

Lessons learned? Challenges?

Do not buy small deals far from home unless you cant help yourself!

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

Hans Box with Old Capital Lending
Mike Holly at Schertz Bank
Reynold Toepfer with ARC multifamily