Another 'infinite return' multifamily deal

[Cody L.]

Of all the deals I've done while being on this site, I don't think I've ever posted in this area.  Normally my use of BP is to come on from time to time, offers some help where I can (pay it forward) and leave it at that.  Given I don't share my company info and I'm not trying to sell anything or build a 'brand', I don't often go into much detail on things.   I've given my aprox portfolio size when context matters and that's about that. 

However, it's 2024 and I figured I'd share a deal that might just motivate those of you looking to finally jump in and get started.

In a very cool/desirable area of Houston, I just bought a portfolio of four multifamily buildings.  3 of them are walking distance to each other, while the 4th is a few miles away.  I let a broker friend of mine know that I'd consider selling the 4th property for $x.  It was a fair price (and quite a bit under my blended average per door).  He brought me a buyer, and we made a deal happen.  The other 3 were financed with Freddie.  I had started the process before I even bought them so I was able to refinance quickly after I closed (and got to take advantaged of the recent rate drops -- I'm at 6%)

But the meat and potatoes  (I'll use round numbers, but they're within a few %)

The group was $5m

I sold #4 for $1.5m

My Freddie loan was $3.5m

So I'm left being in the deal with no #.  The 3 properties I kept cash flow nicely.  They're in a very nice area so high land value, high appreciating, etc. 

It wasn't as large as some of my other recent deals, but I love the deals I can quickly get debt on and get my cash back to do it again...   For a while it seemed like I'd keep finding these little 10 unit type deals for about $750k (I'd pay cash to close quickly w/o fuss -- part of how I got a good deal).  They'd appraise for ~$1m, and I'd refi and get about $700k back out.  Then do it again.   That was just before covid and zero interest rates which made prices skyrocket (when rents didn't) and I could no longer find good deals since the market was flooded with new buyers willing to pay whatever. 

[Travis Timmons]

If you can take down a $5M deal, you don't have to know how to spell infinite.