Multi Unit investment with zero out of pocket using OPM.

[Joe Archbold]

Investment Info:

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

Purchase price: $470,000
Sale price: $507,000

This property was very unique for the area. The prior owner over the years house hacked and lived in every one of the 5 units and completely remodeled to excess. granite and stainless in every unit. very ornate tile showers. It needed very little on the interior. To Acquire this building I used an outside investor who provided funds via his SDIRA and we had a promissory note for his investment.

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

It was a very unique property. A very large Victorian style home turned into a 5 unit.

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

My realtor had created 4 or 5 different searches for me so I will receive notification for anything in my desired area that meets the criteria, I would review, drive by them and contact my realtor.

How did you finance this deal?

I used an outside investor who used his IRA. We worked through getting an SDIRA set up. We used Midland IRA. they were very helpful. To control the agreement we had an attorney set up a simple Promissory Note. His funds covered the down payment. I used none of my money to acquire this property.

How did you add value to the deal?

The place needed lots of TLC as an older Victorian. Cleaned exterior and cleared debris in yard. Had an amazing Pergola and trellus for tenants to share. all needed cleaning and made for a great common space.

What was the outcome?

Although we would get top of market rents, the maintenance was complex with all the high end fixtures and appliances. It also had some larger capital expenses coming. It would take a little extra time to rent as it was costly as some of the units were pretty small. It did not have separate utilities so we billed back based on Sq footage. Although were cashflowing well, when we would have a vacancy it took too long to re-rent, more so than my other units.