Spaulding Building Fourplex

[Jeremy Bear]

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $490,000
Cash invested: $75,000

Build to Rent, development then holding long term or atleast till I find suitable development projects or out of state rentals to replace it.

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

Wanting to build my first rental and had the opportunity to get a great deal on the land.

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

Done as my first deal learning to develop with my veteran developer brother in law.

How did you finance this deal?

During lot loan then construction loan was financed through private money lenders with my exit loan either being a conventional mortgage or perhaps a commercial loan through our business if possible.
The down payment was through my life savings that I'd been putting away for property investing.

How did you add value to the deal?

By buying land at a cheaper price I already had some equity, combined with being able to build for cheaper than it is to buy, I can get by with far lower initial down payment and earn equity through development.

What was the outcome?

We're going to be finishing construction within this month and it's going to be held for a long term rental for at least a couple years. With everything brand new maintenance should be ultra low for the initial decade or so.

Lessons learned? Challenges?

Learned a ton about new construction from a different perspective. I previously worked as a construction worker for 4 years but very glad to be approaching it from the investor perspective.
Definitely learned that some cities are far more accepting of new building while in my case the city took a long time to finally get through the whole process racking up more loan interest. Fortunately we got all the approvals squared away before getting the construction loan.