Yosef Your Brosef’s Night and Weekend Multifamily Journey #2: 68 Unit apartment just closed last Friday following 44 Unit closing 3 months ago. Currently have a total of 112 Unit as GP since beginning my journey about 1 year ago.

Me: Full-time W2 lawyer with 9-6 job (well...officially anyway) with two young, demanding girls.

To get to know my background, please read about my first deal, 44 Unit closed 3 months ago: https://www.biggerpockets.com/forums/223-biggerpockets-success-stories/topics/921192-my-first-ever-44-unit-mf-apartment-closed-in-dec-2020?page=1#p5370534

68 Unit Property Background:

1999 Built B class 68 Unit Apartment in Wichita KS.

We got this lead about 8 months ago from a consultant and underwrote it. We liked it and started working on it.

Little did any of us expect the process to to go this long!!! I had some sleepless nights due to this one!! Stay tuned to the end of the story for several twists!

Initial deal structure: Syndication with one LP class, Fannie Mae Loan Assumption, Supplemental Loan, Two LLCs - Manager LLC & Fund LLC (GP class & LP class)

Some of the milestones:

August 2020 - 68 unit LOI accepted and PSA negotiation started.

September 16, 2020 - 68 Unit under Contract / Due Diligence (Financial and Physical) started.

October 2020 - Reviewed PPM and OAs untill 4 am making comments / First Deal Presentation to Potential LPs / This was also when we got the first 44 Unit deal under contract.

November 2020 - Multiple calls/emails among 4 attorneys (Lender attorney, Buyer's Closing Attorney, Buyer's SEC Attorney and Myself) which ended with restructuring the deal creating another entity (Holding LLC), revision to OAs and PPM. So now total three LLCs / Due to the change of entity structure, need more time to close ending with extension of Financing Period of 45 days with $10K extra EMD deposit / 2nd Deal presentation.

December 2020 - Prepared to close but the property's physical occupancy rate started going down and lender started being concerned about it. At the time of contract, it was approx 95%, but it went down to 90%, affecting the amount of supplemental loan. Seller agreed to extend the financing period further with no further EMD until 3/15/21.

January & February 2021 - Spent time trying to have our PM coordinate with seller’s PM to recover the occupancy back to 95% + / In the meantime, communicated to the seller to extend the closing another month but was refused, and ended up getting 2 week extension until the end of March / We got the occupancy back to where we were / Towards the end of Feb, we had another major deal structural change by creating another class of share with much higher return but with 6-figure minimum to attract more investors / We decided not to pursue the supplemental together with the loan assumption / PPM and OA amended, reviewed and implemented.

March 12, 2020 - On the day of closing:

We weren’t sure if this closing was really happening because everything moved really fast and the lender’s attorney said if he wouldn’t get certain things by morning, we may not close this and may need to push it to the following week.

Joe drove an hour to our local bank to initiate the wire to the escrow on time. I was constantly talking to the attorneys making sure things were moving, and Hendra and Mercy were collecting the updated PPM and OA and sending them out, etc. while patiently waiting and wishing for the closing to happen…

AND IT HAPPENED!!!!

After 238 days, we pushed through as a team and never gave up to make it happen!

Throughout the whole process, I learned a ton and valuable lessons:

I gained a deeper understanding of how syndication works: the structure and the model. But this one was more than just a syndication. We had to go through the loan assumption process and learned a ton. We also learned how supplemental loan played a role in this. I witnessed how capital raising works and how to present a deal to investors. Another twist we had to go through was we had to change our deal structure at the last minute per my mentor’s recommendation and it totally worked!! We created another class of share! People loved it!

I also learned how to deal with the seller’s attorney, lender’s attorney, SEC attorney and our closing attorney. Including myself, 5 attorneys exchanged about 90 emails for the last couple of days prior to the closing.

Cheers to all who helped us along the way and congrats to my partners as we grew stronger throughout this process!

Special thanks to Greg & Kim who guided us through the whole process and will help us with asset management. And to Darren and Ray who helped us raise capital and did a superb job. And to Chris Jackson and Marco for deal analysis and all their guidance and advice.

I thank you all and let’s go for the next deal!!

Yosef