Investment Info:
Large multi-family (5+ units) commercial investment investment.
Purchase price: $1,800,000
Cash invested: $650,000
Contributors:
Tyler Moyer
We found this deal off market through a direct mail marketing campaign. The seller had owned this property since he was in his early 20's and was now at retirement age. We really caught him at the perfect time when he wanted to realize the years of hard work and go into full retirement. During negotiations while under contract, we sold the upside of owner finance to reduce the taxable hit upon sale and he agreed to $300k down on $1.8M sales price. This 32 unit building was heavily under valued and rents were grossly low for the area. We went in knowing it needed fully remodeled which we completed mid summer 2019 just before Central Washington University was back in session.
We are now fully leased at market rents and cash flowing very well. The plan is to hold for 5 - 7 years to benefit from the cash flow and later on the appreciation from our value add and market growth.
What made you interested in investing in this type of deal?
Value add multifamily property. That is what we love to do.
How did you find this deal and how did you negotiate it?
Direct mail marketing campaign. We have been a bit surprised how successful our mailers have been for us.
How did you finance this deal?
Owner finance at 16% down with 4.5% interest
How did you add value to the deal?
100% complete total unit renovation inside and out.
What was the outcome?
Beautiful, fully stabilized property a stones throw away from local university. We plan to hold until we reach our target of COC and IRR.
Lessons learned? Challenges?
Never underestimate your abilities. Focus your efforts on networking and building a great team so you are absolutely prepared when a great deal comes across your desk.
