First Investment Property!!

[Jarett Tigges]

Investment Info:

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

Purchase price: $600,000
Cash invested: $178,000

14 Unit Apartment Complex Value Add. All 1bd/1bath with average rents at $498. Plan is to take rents to $550 through unit renovations and added security on the property.

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

We have been searching for our first apartment complex for about 5 months. We had sent out several LOI's and negotiated deals but none of them hit our minimum profit requirements (CoC return: 8%, IRR: 15%) unit this one.

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

We found this deal driving for dollars. We were actually out looking at a property near this one and really liked the street it was on. We cold called the owner and he was interested in selling. We established his motivation (this one was farther from his other properties and he was tired of dealing with it) and told him the price that worked for us. He countered some of our terms and we countered back till he agreed.

How did you finance this deal?

We obtained owner financing on this property. $480,000 on a 30 year amortization at 4.6% interest with 1 year of interest only.

How did you add value to the deal?

We are currently renovating the first unit and we plan on bumping rents from $550 with utilities to $600 with utilities. Tenants in this area like to have utilities included, and we actually make a small spread on the units where we pay utilities.