Investment Info:

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

Purchase price: $1,050,000
Cash invested: $5,450,000

Land development project for 17 units.

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

Land development was always something I wanted to get into but was intimidated by the sheer volume and size. Ground up multifamily developments are very different from the residential projects I had worked on previously.

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

A lender that actually funded a few of my flips reached out to me with this opportunity. Ran numbers multiple times over and it made financial sense. My only negotiation was with the person who had bought the deal. I ended up bringing him in as a JV partner since he had vast experience in deals like this.

How did you finance this deal?

I had funded the deal through a 506(c) private equity fund (which is how I fund my projects). Secondly, we closed with a hard money loan. Lastly, we are working on a commercial build loan through a wall street hedge fund to complete the project.

How did you add value to the deal?

This deal was originally a two family house. We filed plans for a 12,000SF 17-unit elevator building. I expect to begin work in January 2021 as our plans are nearly approved.

What was the outcome?

Pending - plan is to stabilize building with tenants and sell at average cap rate.

Lessons learned? Challenges?

Pending - will keep posted.

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

A plethora of them including four attorneys, 2 agents, JV partners, contractors, 2 lenders, accountants, sellers and the wholesalers.