BRRRR without the rehab in 2 months

[Ephrem Bekere]

I will take 10 if these please!! Probably my favorite deal yet. 

Investment Info:

6 unit apartment building over 7k in sqft. 

Purchase price: $300,000
Cash invested: $0.00

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

I wanted something that was bigger. I am also not able to get any conventional loans so commercial it is! 

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

Off Market from a post card I sent over a year ago. Offered seller an all cash offer at 300k or a financed deal at 323k. Seller chose cash. 

How did you finance this deal?

80% Hardmoney on the purchase and got a partner for the 20%. I refinanced right away with a commercial lender. 

How did you add value to the deal?

Nothing yet, however the property has under-market rents. The plan to to increase the rents over the next 8 months close to market value. 

What was the outcome?

Closed on this on Dec 11th, 2020. Reached out to a commercial lender right away that didn't require seasoning. They appraised the property and it came at 392k. They gave me 80% of that which was 313k. I paid the hard money and the paid my partners the 60k they invested within 2 months :)) I closed on the refi Feb 11th, 2021. 

Lessons Learned:

Commercial lenders are easier to work with. When applying for a loan, apply for as much as possible. Even if it comes in lower you will get that amount. But if appraisal comes back high and you applied for a lower amount that's what you're getting. 

Thanks BP for all the inspiration!