24-Unit Value Add Multifamily

[Zane Belden]

Investment Info:

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

Purchase price: $720,000
Cash invested: $275,000

Contributors:
Devin Haertling

24-unit value add apartment complex across 6 buildings. All 2 bed, 1 bath. Plan to renovate 18 of the 24 units, improve exteriors, etc and raise rents. Once this is complete we will cash out refi or possibly look to sell.

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

Outdated cosmetic interiors leading to very low rents made this investment an ideal value add through unit interior renovations.

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

Local agent

How did you finance this deal?

Financed through local bank, 20% down. Raised funds to close and execute renovation plan through friend and family investors who had expressed interest in partner on future projects with us.

How did you add value to the deal?

Significant unit interior remodels (19 out of 24 units) and minor exteriors/landscape updates.

What was the outcome?

We are currently renovating unit #19 out fo 24. We have raised rents significantly and are planning a cash out refinance in early 2021.

Lessons learned? Challenges?

Negative property stigma can hold back initial unit renovations from getting their full rent potential. But once you renovate enough units and get enough new, higher paying tenants, there seems to be a break over point where the property stigma changes and the higher paying tenant base becomes the norm. Always ahem to find and use good subs for renovations.