New commercial property, slight rehab, Cleveland suburb

[Darin Marvin]

Investment Info:

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

Purchase price: $100,000
Cash invested: $50,000

Got this gem from a guy who was having trouble finding a buyer (due to reporting losses year after year to IRS). I used some creative refinancing and got him to agree to seller financing at a killer rate. Kind of a rare bird, this is classified as transient housing, but some of the tenants have been here for many years. Easy to rent, and keep high occupancy rates too. Can't wait to see what this appraises at in a year or two of "seasoning."

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

High cap rate and CoC ROI.

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

Word of mouth through my realtor. She has a network of clients, many of whom are retiring and getting out of rental properties now.

How did you finance this deal?

Refinanced some of my single family rentals and also got the seller to agree to a private loan.

Lessons learned? Challenges?

I got him to sign a PSA early and locked him in while I tried to get commercial financing (which was a dead end). After he got uncomfortable waiting, he was ready to agree to private financing on part of the deal.