240 Unit Value-Add Deal CLOSED in Houston, TX

[Brian Alfaro]

My real estate journey started in 2018 when I found BiggerPockets and decided to jump into the Single Family space in my market, Houston, TX. I loved Commercial Real Estate, Multifamily in particular, but I had a limiting mindset and didn't know how to scale a real estate business, form partnerships or add value to others. I thought, "I can only by deals when I have X dollars saved up." I had zero real estate background or experience; my parents are life-long renters. I was able to close on my first single family rental in 2019, but it didn't give me the excitement I thought it would. It was a solid deal, but I had a hard time envisioning how it would be scalable. 

In early 2020 I decided to put a pause on continuing to look for single family rentals and began to ask myself, "is the single family space for me?" COVID was a silver lining because it forced my life to slow down and gave me time to reflect on this very question. After much thought and many conversations with others, I decided I needed to CRUSH my limiting beliefs and jump into Multifamily. I joined a Multifamily mentorship group in July of 2020 and a Multifamily mastermind in October of 2020. Within these groups, I found a couple of partners in my market and was able to join their team and bring my skillset to focus on taking on larger deals. I have found my passion in Multifamily Real Estate; I love the abundance mindset and helping other Active & Passive investors build wealth through relationships. 

My timeline:
Late 2018 - Committed to learning Real Estate Investing, Focused on Single Family

April 2019 - Closed on first BRRRR in Houston, TX

July 2020 - Joined Multifamily Mentorship Group

August 2020 - Joined Multifamily Private Equity Group (Blue Oak Capital) where we source 75-200 units, B & C class, value add Multifamily properties. We also give back to the Real Estate community through our Meetups, Podcast, Blog, and Newsletter. 

October 2020 - Join Multifamily Mastermind to broaden my network & education

May 2021: Close on 240 Unit with my Partners in a Co-GP opportunity in Houston, TX

What I've Learned: You will only accomplish what you set your mind to. If you have limiting beliefs, you will have limiting results. Educate yourself and strengthen your network. Add value to others. Good things will happen! Now lets talk about the deal...

Location: Houston, TX

Size: 240 Units

Vintage: 1979

Class: C-Class

Purchase Price: $18.6m

CapEx Budget: $3.8m

Equity Raise: $5.6m

Offering: 506c (Accredited Investors Only)

Business Plan:

This property was found off-market from one of the partners. The seller had owned the asset for 24+ years and had not renovated the units or raised rents. He self-managed the property with an in-house team and was focused on keeping high occupancy through low rents. All 240 Units are Classic (not renovated), so that provides us with the opportunity to renovate the units with a modern finish this asset class and market demands. Current market rents upon takeover were $200-$300, depending on the unit, below market. The business plan is to renovate the units and exterior, bring the property back to life, bring rents to market rate, and refinance. The refinance will return over 70% of investors capital upon execution. This is a 5-Year hold. The lead sponsor on this project has an in-house construction management team, giving us confidence this job will be done properly. 

Summary:

I am really excited about this opportunity and thankful for the entire real estate community, including many people I met here on BiggerPockets. My team and I are building a lot of momentum, and we are confident big things are to come the remainder of this year. 

Feel free to reach out and connect!

[Eric James]

Did I miss the part about what your stake in the property is? That would seem as relevant as the size of the deal.