21-year-old turn-key 8-plex with a brand new roof. 8 units, each of which are roughly 970 square feet, with 2 beds and 2 baths. Located in Burgaw, NC (Pender County), about 20 minutes North of Wilmington, NC.

This deal all started with a turn-key singlewide trailer with land that I bought last year (from a wholesaler) for $15,000. I sold the trailer 7 months later for $98,000. I then did my first 1031 exchange to use these proceeds as the $90,000 down payment on this 8-Plex.

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

I found this deal via a hand-written letter directly to the owners. They happened to be going through a divorce and said it was perfect timing for them to sell. I offered $435,000, they countered with $450,000, and I accepted.

How did you finance this deal?

This was my first commercial loan, and I used a local credit union. I used the 1031 money to cover my 20% ($90,000) down payment. They financed the remaining $360,000 at 4.25% fixed for 5 years on a 15 year term with a 20 year amortization.

What was the outcome?

I believe that the fair market value, with current rents, is around $700,000.

I plan to do a cash-out refinance on this property in 6-12 months to hopefully pull out $200,000+ that I can use to buy more properties like this. I will also increase rents from the average of $675/mo to match market rents, which are currently around $850/mo and increasing rapidly. Once rents are $850/mo, I calculate the value to be around $950,000.

Lessons learned? Challenges?

It was easier to finance and close on this deal than it is to do one single family deal. I will definitely continue looking for properties like this. I may also start hunting down some much larger properties, and go the syndication route. Time will tell!

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Bought an 8-plex! My first 1031 Exchange and commercial loan!

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