Acquisition of 64 Units in Charlotte

[Charles Seaman]

Investment Info:

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

Purchase price: $7,400,000
Cash invested: $2,695,143

Contributors:
Adam Balsinger

This is two (2) adjacent multifamily properties totaling 64 units that my partners and I own. We acquired the properties through syndication and are the operators of the deal. These are stabilized assets with operational value-adds. A 3-7 year hold period is anticipated.

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

The market itself, as Charlotte is one of the hottest markets in the market. The properties are located in the path of progress and are in an area that's starting to gentrify. The seller did a good job of maximizing rents and had the highest rents in the area for comparable assets, so the deal underwrote very favorably.

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

I found the deal through a broker. We initially received it as an off-market deal and then wound up submitting a preemptive offer once it was brought to market.

How did you finance this deal?

We financed it using a Fannie Mae loan through Arbor.

How did you add value to the deal?

We just purchased it, so we haven't added value yet. But we will add value by bringing two offline units back online and by burning off loss-to-lease as current leases expire.

What was the outcome?

To be determined, but big things are expected.

Lessons learned? Challenges?

The biggest challenge was timing and negotiating an extension with the seller, which caused us to give up more than we would've liked to. The lessons learned are that we need to improve certain processes and start things earlier in the process (ex. submitting our loan application and preparing our offering documents earlier).

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

Yes. I worked with Ron Corrao of Capstone Companies. He was the broker and I would recommend working with him.