Apartment Building Gut Renovation

[Brad Lauck]

Investment Info:

Large multi-family (5+ units) fix & flip investment.

Purchase price: $1,070,000
Cash invested: $650,000

33 unit apartment building vacated. We gutted this building to the studs and are now putting it back together. All new mechanicals and tenant paid utilities.

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

I originally bought this as a C class property. After struggling with maintenance and management I decided it needed to be vacated and renovated.

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

I broker brought the deal to me. We negotiated just under the seller's ask price.

How did you finance this deal?

Conventional loan to purchase. After the first year we got a new construction loan.

How did you add value to the deal?

Vacated the building and renovated every inch of the property including all mechanicals.

What was the outcome?

We will not be done for another 5 months but the project is on track and going well.

Lessons learned? Challenges?

Management is one of the most important parts to a deal and 20 years of cheap fixes will kill the maintenance budget.