Investment Info:
Small multi-family (2-4 units) buy & hold investment in Atlanta.
Purchase price: $650,000
Cash invested: $150,000
Strongly performing triplex in the Virginia-Highland neighborhood. Acquired off-market at $100k below market value, self-managed, and funded partially with investor capital with waterfall equity structure. We pre-leased this property within 36 hours of closing with renovations to be completed within a month. Looking to do another Joint Venture of this deal structure.
What made you interested in investing in this type of deal?
We are focused on repositioning class B & C properties in A & B class areas. This property fit our criteria for location, renovations, gross potential revenue, and exit timeline.
How did you find this deal and how did you negotiate it?
We found this deal off-market through one of our off-market suppliers.
How did you finance this deal?
Using a long-term line of credit at 2.174% with equity funded by investor and personal capital.
How did you add value to the deal?
Renovations including converting a 2/1.5 unit to a 3/2 unit, increasing overall cashflow by an additional $1300 per month.
What we bring to the table includes: negotioating, in-depth financial projection, in-house property management, and a strong, vertically integrated team of our attorney, contractors, CPA, and off-market suppliers.
What was the outcome?
A fully-leased, 1-month stabilized asset producing an expected 8% CoC return and a 42% total return by the end of 2020.
Lessons learned? Challenges?
Lesson learned: one of the most important characteristics of real estate investing is creative problem-solving. Turning the 2/1.5 into a 3/2, making an initial "good" investment into a great invesment.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Keith Biggs, Atlanta Realtor
Jeff Raw, Black Dawg Construction
Elizabeth Rawlings, Campbell & Brannon
