First 100 Hundred+ unit complex!

[Jay Patel]

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $7,250,000
Cash invested: $1,750,000

104 unit in an area where not many units were coming online, 25% owner.

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

Purchased ~16 units previously and saw the benefits of scale

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

Brought to us by a local commercial broker

How did you finance this deal?

Local bank financing, and a portion of which was seller financing.

How did you add value to the deal?

Purchased into a proven premium plan, with about 25% of units being upgraded at purchase, we have upgraded ~60% at this time, collecting premiums in the process. Unit upgrade renovation plan in-place on unit turnover, fueled by property cash flows, slow burn but didn't have extra capital to make this a fast process. But the increases in value allowed us to reinvest into more properties and continue the slow burn renovation process.

What was the outcome?

Refinanced property 3x in order to reinvest into more units, allowing the purchase of 3 other properties.

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

Local broker, was a pocket listing of a landlord liquidating his holdings for retirement.

[Taylor L.]

That's awesome, congratulations! What part of the country is this in? 

[Jay Patel]

@Taylor L. Hey Taylor, thanks for the congratulations. It was in Massachusetts. Product is pushing 100k per unit for most deals now, but there are still deals to be found.

[Taylor L.]

Originally posted by @Jay Patel:

@Taylor L. Hey Taylor, thanks for the congratulations. It was in Massachusetts. Product is pushing 100k per unit for most deals now, but there are still deals to be found.

 Wow. I don't know much about MA, but 100k per unit seems very inexpensive for that state! Any collections issues?

[Dmitriy Fomichenko]

Nice! Congratulations @Jay Patel ! 

[Jay Patel]

Thanks @Dmitriy Fomichenko

@Taylor L., through Covid most definitely had collection issues, (would love to say it didn't) but we were managing to mitigate or put tenants on payment plans as best we could. Send out notices asap, and get things into the eviction process even while courts were closed. 

In a non-covid world collections have only been an issue periodically with repeat tenants that wouldn't pay, otherwise rents are collected with the understanding that many tenants also pay late, but that's the minority not the majority of tenants.

[Jay Patel]

Originally posted by @Taylor L.:

Originally posted by @Jay Patel:

@Taylor L. Hey Taylor, thanks for the congratulations. It was in Massachusetts. Product is pushing 100k per unit for most deals now, but there are still deals to be found.

 Wow. I don't know much about MA, but 100k per unit seems very inexpensive for that state! Any collections issues?

 Also, in terms of unit price, it might not seem like a lot still and in many cases it isn't but replacement costs aren't significantly higher in the area (probably changing with cost of construction on the rise), but rents are beginning to max out. So that's just something to bake into the price when searching the area as the product is old and rents aren't rising by much anytime soon. Very similar to midwest fundamentals, but with slightly higher base market rents.