Starting the Journey into MultiFamily Investing

[Ralph Chiaia]

Investment Info:

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

Purchase price: $835,000
Cash invested: $195,000

First off we named it Spring Park Gardens. We bought a 4-famil, 5-family, and single family house all in one spot as one package. It was my first time getting a commercial loan and that was part of the adventure. I called a ton of banks and they all told me to bug off at first. The good thing about that as many were very informative when I asked why not, so I started to see light at the end of the tunnel and understand that I needed an introduction. Luckily, I had met a property manager from the turnkey company in town where I had purchased I single family rental before. She was no longer with them but had a vast network. She got me on the phone with her father who introduced me to a friend who then did a zoom introduction to a local community bank and the rest is history. Now we have a commercial loan, I added her and another partner into the mix, and a construction loan to handled the two vacant units. Eight are already rented but two need some work. The goal is to pull all the rents up to market value and then add in rents from the two that are vacant and dramatically increase the value of the whole property.

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

I wanted to get into multifamily investing. I want to have 100 doors and doing it one by one doesn't seem like a ton of fun. Now that I know that getting a commercial loan is way less painful than a loan on a single family I'm totally hooked.

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

We found this deal on Loopnet

How did you finance this deal?

Commercial Bank and our own money

How did you add value to the deal?

We are Taking to Vacant Units and Rehabbing them

What was the outcome?

Work in Progress

Lessons learned? Challenges?

Challenges is that we immediately found more deferred maintenance than we expected. We expected that.