Waterforde Place, a 48-unit value-add multifamily property

[Charles Seaman]

Investment Info:

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

Purchase price: $2,475,000
Cash invested: $1,348,400

Contributors:
Adam Balsinger

This is a 48-unit multifamily property that my partners and I own. We acquired the deal through syndication and are the operators of the deal. It is a value-add deal with a 2-10 year hold period.

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

It was a well priced asset in a good area that offered a large value add play through operational efficiencies, thus minimizing the risk that's associated with physical value adds.

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

I received it off-market from a broker and negotiated the deal by submitting a letter of intent through the broker.

How did you finance this deal?

It was financed using a Fannie Mae loan that was issued by Arbor.

How did you add value to the deal?

It will be added by increasing market rents to the amounts that similar units in the market rent for and also by charging a fee for individual garages. The previous ownership and management failed to capitalize on both of these opportunities, which leaves plenty of meat on the bone for us.

What was the outcome?

TBD, but big things are expected.

Lessons learned? Challenges?

The biggest challenge that I faced with this deal was timing due to the pandemic. I initially looked at this deal in late January 2020 and had it under contract prior to the pandemic. At that time, the deal wasn't stabilized and required bridge financing. There was a bridge lender onboard, but they stopped lending because of the pandemic. I then extended our due diligence period and the property became stabilized. I went through two (2) more lenders before finally getting the deal done.

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

Yes. I worked with John Phoenix of Cushman & Wakefield. He was the real estate broker on the deal.