Large Multifamily Acquisition - 236 Units

[Account Closed]

Investment Info:

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

Contributors:
Tracy Hubbard

236 Units / Class B / Value-Add

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

Recently Appraised (Jan 2021) with $3.64M Built-In Equity - Based Solely on Stabilization / Rents are $119 Under Market / Opportunity to Convert 64 Studios to 1 BR Units / Seller is Already Achieving 10%+ Bump in Rents on Renovated Units / Very Light Interior Rehab Needed / Roof is 2 Years New /Addtl. Income Opportunity through Internet Upgrade & Covered Parking / Seller is Undercapitalized - Allowing Us to purchase at $800K less than seller paid 1.5 yrs ago

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

Sourced through Broker relationship

How did you finance this deal?

Non-Recourse Bridge to Agency - 75% LTC / 3 Years IO @ 4.65%

How did you add value to the deal?

Light Rehab of Units, Raise Rents, Covered Parking & Internet Upgrades - 3 Year Refinance

What was the outcome?

Just closed and starting major renovations this coming week (3/31/21)

Lessons learned? Challenges?

Patience is the name of the game! Started speaking with the seller in February 2020, took many months to come to terms on price - went under contract in October 2020 . Never compromise your underwriting to get a deal done - wait for the right deals for your investors. Make sure you have plenty of contingencies in place - Bridge loans bring some unknowns at closing and can swing 6-figures

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

Definitely - make sure you have a solid team!

Mortgage Broker: Brandi Shotwell with Reno Capital
Attorney: Dugan Kelley
Insurance: Matt Sutika
Cost Segregation: Brian Bigham with Madison Specs