This is truthfully one of the best multifamily deals I have seen in the past year. It had meat on the bone from an operational perspective for us to come in and re-evaluate/cut vendor contracts to immediately reduce expenses and then ample room to raise the income such as adding additional storage for tenants, charging for covered parking, and then increasing rents to market rate. It is also in a fantastic sub-market within Greensboro with a great tenant class and nearby amenities.

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

My partners found the deal through a relationship with a broker. They have connections to the local market were able to jump on this deal. The seller was at the end of their business plan and it was time to sell so we came in with a strong offer and deposit. Upon due diligence, we negotiated a $175k closing credit from the seller for added repairs.

How did you finance this deal?

We syndicated this deal and raised money from private investors to knock it down. My role was to raise a portion of the amount needed to close (down payment, repairs, reserves, etc.).

We got a Freddie Mac Small Balance Loan (SBL) at 3.54% amortized over 30 years. It is low rate, long-term, and non-recourse. All the things we love in financing.

How did you add value to the deal?

We will cut excessive vendor contracts, add additional storage, charge for covered parking, renovate 15 outdated units and increase rents ~$130/unit. The property had been running high on expenses so right off the bat we had the opportunity to increase our NOI on this deal.

What was the outcome?

We successfully closed our first syndication. We also brought in several first-time passive investors, or LPs, who are experiencing investing in syndications for the first time. It's been awesome to put a great deal together while expanding those who are positively impacted by investing in real estate!

Lessons learned? Challenges?

Raise more than you think you need! I thought my first raise would be easier than it actually was. When it comes to actually wiring in the money, people who I thought for sure would be in ended up not investing in the deal. It humbled me and made me realize that raising private capital is a completely different side of the business. But through that, I surprised myself and found capital from other people who more than willing to get into this great deal so it worked out - thankfully!