7-Plex sold in Sioux falls

[Andrew Adam]

Investment Info:

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

Purchase price: $220,000

First deal I had partnered with someone on. It was a good learning experience with a great partner. Because we got it so distressed and fixed it up so much we had a lot of capital in it and had forced a lot of appreciation. It was a heavy lift but we made some profit which was nice.

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

It seemed cheap at the time.

How did you finance this deal?

Commercial loan, we had a great loan officer that helped us move super quick.

How did you add value to the deal?

We increased the rents after rehabbing two units, replacing the roof, painting the exterior, removing trees, upgrading the electrical from fuse boxes to circuit breakers, and replacing various plumbing including the main stack.

What was the outcome?

The property appraised for much higher than we got it to where out return on equity would have been pretty low if we left that much capital in the deal so we sold. The cool thing is it was profitable for us but there was still meat on the bone for the next investor to continue to improve the property and investment.

Lessons learned? Challenges?

Even though I started out buying older homes that were chopped up into multiple units, I am not at a place in my investing career where I only want to buy properties that were built for the amount of units they currently are.