23-Unit Apartment Complex for First Investment

[Michael Dunn]

Investment Info:

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

Purchase price: $1,050,000
Cash invested: $275,000

23 unit apartment complex with six additional units and a laundry room that are partially built out.

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

Wealth accumulation. Potential upside of handling most/all of the maintenance and remodeling needs was additional $$$ in my pockets.

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

Loopnet.com; Worked directly with the listing Realtor.

How did you finance this deal?

20% down payment & bank lending.

How did you add value to the deal?

Raising rents, remodeling units as they become vacant, improving common and exterior areas, better maintenance and management than prior ownership provided. Treat the tenants like you'd want to be treated and most of them will treat you better.

What was the outcome?

So far, so good.

Lessons learned? Challenges?

Getting the final 'yes' on commercial lending takes a longer and is more involved than primary residence loans. Recognizing what the insurance company is concerned with before purchasing the building. In my case, the parking lot and breaker panels are high on their radar.

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

Nobody I'd recommend.