Round Lake Beach, IL 6 Unit Multifamily Reposition

[Joseph Scheidt]

Investment Info:

Large multi-family (5+ units) buy & hold investment in Round Lake Beach.

Purchase price: $350,000
Cash invested: $90,000

Contributors:
Ryan Wosick

Acquired the asset at a little over a 9 Cap. Currently repositioning the asset, looking to refinance towards the end of 2021. We expect to refinance at around a 7 cap with NOI increased by 20% or more, pulling out all our construction costs, leaving around $150k in equity in the building cash flowing around $2k per month.

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

Multifamily over 4 units is valued based on cap rate and NOI, which provides an additional opportunity for upside that is in your control as an operator.

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

Owned by a family friend who wanted out of the property. They had done little to no maintenance to the property, we bought it for what they had paid 15 years ago.

How did you finance this deal?

25% down payment conventional commerical mortgage

How did you add value to the deal?

Remodeling each unit one by one, then raising rents to just below market. Around a 20% increase in rents for each unit.

What was the outcome?

Still in the process of remodeling units.