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Updated over 3 years ago,
2nd Deal - Now I'm a Real Estate Investor!
Investment Info:
Large multi-family (5+ units) buy & hold investment.
Purchase price: $1,625,000
Cash invested: $390,000
Purchased 30 condo townhome units to hold as rentals, and sell them off piecemeal to owner occupants.
What made you interested in investing in this type of deal?
This deal has 3 viable exit options: 3) flip to another investor - I got the first look and there are investors interested at above my basis; 2) hold it as rentals long term, pushing rents to market on turns/renewals; 1) the real value - sell them off to owner occupants for substantially higher than my basis in the property.
Although I'm looking to buy and hold long term, the upside on the sell-off option is very compelling. And as they say, you don't find good deals, you create them.
How did you find this deal and how did you negotiate it?
My property manager (who knows I can close) brought this to me first after the seller (long time friend of hers) told her he wants to sell.
How did you finance this deal?
Raised the equity and got a local bank to lend 80% plus up to 80% of reno costs.
How did you add value to the deal?
We're going to upgrade units on turns and sell them to owner occupants, unlocking the real potential in the asset.
What was the outcome?
Just got started... (collections in August are at 100% of occupied unit, and 1 unit is on the mls)
Lessons learned? Challenges?
1. You need to be willing to expand your comfort zone and create/take advantage of opportunities that are outside your wheelhouse;
2. Push yourself. This raise was 50% larger than my previous one. I had commitments for the entire amount within 27 hours of my initial email, and eventually had a waitlist greater than 100%.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Property manager who is well connected in the market. If you're interested in connecting, dm me.