Investment Info:
Large multi-family (5+ units) commercial investment investment.
Purchase price: $400,000
Cash invested: $600,000
Value 2,600,000 currently based on 8% cap rate. Vacation Rentals 30,000 to 40,000 per mo winter rents, approx 1/2 that amount other seasons. 5.7 acres with 6 SFR's totaling 10,000 sf living, Expandable by 50%, Covered RV spaces, Own Wells so pure fresh water with no city chemicals only costs $60 per month for all the homes! Rents can increase by more vigorous marketing in Summer and Fall. Tremendous income 4 x the debt service
What made you interested in investing in this type of deal?
Tremendous cash flow
How did you find this deal and how did you negotiate it?
Scouring available and off market properties
How did you finance this deal?
Private financing, and utilized Profit Sharing Plan funds
How did you add value to the deal?
Improved all the homes, major remodels for the homes and grounds, pool and well and various structures added. Fully furnished all the units including 20 TV's and new appliances and various capital improvements (HVAC etc)
What was the outcome?
Property is now valued at 2.6MM and will be $4MM when rents are maximized
Lessons learned? Challenges?
Should have started the vacation rental aspect sooner, first few years of our 11 yr ownership was wasted on unfurnished low rents, now 5 x that amount is earned
