Ground-up Affordable housing - APPROVED!!!

[Everett S.]

Investment Info:

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

Purchase price: $15,000
Cash invested: $5,000

Our first ground-up development project has been approved!!!! This is a vacant lot in the beautiful and historical Driving Park area of Columbus, OH. We will be building a duplex (3/2.5 - each unit) with a 2 car garage for each unit. 4 car garage in the city?!? We have a pipeline of vacant lots with similar stats and equity partner availability.

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

It's killing two birds with one stone. It's what Lasting Legacy Real Estate represents in it's truest form. We don't displace families, we find a solution that benefits the tenant and investor. Being able to build a brand new home for two families who are in need and know they will be able to raise their families in a worry-free household feels amazing! As a business, affordable housing allows us to secure cash flow because of the high demand for it in the city.

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

We have secured a vast land portfolio that allows us pick which location best fits LLRE and our investors cash flow requirements and design capabilities. We were able to locate this vacate lot for a mere $15,000. There was no negotiations required or needed here. With such a low acquisition cost there allows for enough room in the project to develop at a premium, especially in this area.

How did you finance this deal?

We have secured a local CDFI who understands and believes in our business model and overall vision. It was important for us to secure non-traditional lending that doesn't require such stringent construction requirements. But at the same time we are expecting to abide by multiple affordable housing restrictions. We are well below market rate/terms on this deal. Our construction terms alone are 2yrs at 2.5% with a 30-yr AM schedule with a 4-yr extension to perm loan.

How did you add value to the deal?

Providing this home with the 2021 features and fixures and most important providing this property with two-car parking garage is a huge feat for this property. I have yet to find a comp in the area providing what this property will have on one lot.

What was the outcome?

To be continued...

Lessons learned? Challenges?

We are constantly hit with challenges as most developers do. Most of our challenges have been with initial design. The city of Columbus is very particular about the style of home. Building this structure on a way way street and building a four car garage has been another design hurdle with many man hours put into getting this done right. Construction will begin soon and I'm sure there's more to come but we know what's expected of us so permit timing will be our greatest challenge here.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

We worked with the LAAC, development consultant, zoning attorney and the Lasting Legacy development team.