1st Multifamily Purchase and Syndication in Panama City, FL

[Johnny Lynum]

Investment Info:

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

Purchase price: $1,050,000
Cash invested: $230,000

Value Add 18 Unit Apartment via Syndication of $95k of the down payment. Appraised at $1.24M before closing

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

I attended a Jake and Gino multifamily event back in Oct 2018 . It opened my eyes to how close I was to making the transition from single family investments to multifamily. I found this deal 45 days later and submitted my LOI shortly after!

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

I found it on MLS and reached out to the broker to walk it before submitting my offer. It had an open insurance claim which we assumed. Additionally, we requested the buyer to repair an active water leak prior to closing and provide $25,000 in concessions to cover expenses not covered by insurance.

How did you finance this deal?

I did a syndication hybrid model. I raised $95k in 2nd position notes at 7% cash on cash return per year for 2 yrs with a $30,000 equity share at the refinance milestone. It works out to a 17% IRR over the two years. I maintained 78% equity and the remaining 22% is held by 2 other friends who invested.

How did you add value to the deal?

We will add value by repairing 4 units damaged by hurricane Michael and increase the NOI by

What was the outcome?

We are still executing the business plan.

Lessons learned? Challenges?

I self managed for 5 months and learned alot working with my tenants through COVID. However, I was more than happy to hand the keys off to my new property management company!

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

Definitley leverage local credit unions for commercial projects less than $5M. Having solid relationships with them is extremely critical to having a strong lending partner with low fees and great terms. Credit unions keep their loans in house and have alot of flexibility in their lending products.