Learning multi-family apartments

[Patrick Cozadd]

Investment Info:

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

Purchase price: $195,000
Cash invested: $85,000

Contributors:
Ken Nyczaj

My partner, Ken, found this deal through his DM campaigns. It was a 6 unit built in 1900 with some foundation issues and badly needs updating. We are working with our partner, LSHI Contractors, and our lender, Queenstown Bank, to make necessary repairs, update roof, windows, exterior, add a seventh unit and rehab the existing units one by one. All in price should be around $340,000 and revenue should increase by around 30%.

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

We are wanting to scale our business and multi-family and/or mobile home parks is the best way to maximize our efforts.

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

Ken was contacted by seller after one of his direct mail campaigns. He negotiated with her after discovering some issues during our inspection that allowed us to purchase for $195,000.

How did you finance this deal?

Kathy Clark at Queenstown Bank is our go to lender for deals on the Eastern Shore. She is very helpful, able to customize products (to a degree) and terms are great.

How did you add value to the deal?

Our partner, Louie, from LSHI Contractors is handling repairs and upgrades. By updating the exterior and renovating the units, we hope to increase rents around $100 per unit. There was built in equity going in and we hope to increase that through renovations and proper management.

What was the outcome?

Still stabilizing this property but current CFA is around $1500 and should increase once new unit is added and property is fully rented.