Vista Ridge - 41 unit in Chattanooga, TN

[John Fortes]

Investment Info:

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

Purchase price: $1,815,000
Sale price: $2,600,000

Vista Ridge - 41 unit

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

Great opportunity for a cash flowing asset and a value add business plan.

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

Relationship with investors that had access to the opportunity.

How did you finance this deal?

Community bank financing

How did you add value to the deal?

Renegotiated contracts and unit turns. Maintained tenants with light rent increases as well. Staggered leases to coincide with unit turns to maintain the business plan target.

What was the outcome?

Exit within 15 months of holding for a 1.5X equity multiple to investors.

Lessons learned? Challenges?

Learned the value add model is the business plan to carry forward. If another investor decides to through capital at your current asset, compare that to the remaining years of operations and make the decision to exit or move forward with the asset.

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

We executed the plan as expected because we underwrote it conservatively, had the necessary reserves & leveraged great long term debt that didn't not come with a high prepayment penalty.