All Forum Posts by: Jerry Lymburner

Investment Info:

Large multi-family (5+ units) note investment investment.

Purchase price: $900,000
Cash invested: $225,000

11 plex that was a bit dated but in good location.

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

I was looking for investors to purchase, a couple passed on it. I saw tremendous upside and partnered with my better half and another investor (Now our partner!) with cash and has been better than expected.

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

With a mailer!

How did you finance this deal?

Owner finance with a balloon

How did you add value to the deal?

We immediately redid windows to make the non-egress windows egress with new. Leases that were M2M, were brought to market rent and charged a utility charge-back fee.

Plans to remodel units as they become available, include enclosing a 1 bedroom with a deck and converting it to a 3-bedroom unit. New siding on building as well.

What was the outcome?

Brought rents up several thousand a month in a short amount of time.

Lessons learned? Challenges?

So good so far. Goverment paid leases are hard to get out of when tenants have assistance.

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

Me!

Hello everyone! If you're wondering if there are still mid to large multi family deals happening with todays rates, they are! Currently have nearly 15 million in volume through 4 different transactions, from as small as 12 units up to 32. Financing for two of them is owner finance, while the other two, one a 24 unit NEW construction (Yes that's happening still) are both through conventional financing. The interesting part is they all cash flow really well, two of them need a lot of work and had to use creative wording in one of the owner finance deals during the transaction which then transferred onto the DOT for a recapture of monies in case of foreclosure.

While currently falling, you can beat the interest rates if the seller is willing to owner finance to you. If a seller is reluctant, get a short balloon on the deal and refinance the property. I have had good luck with the promise for the seller to only be on the hook as the lender for short term, while buyers are waiting out the rate hike. 

If you are a buyer that is getting traditional financing and you want to wait out the inspection period BEFORE ordering the appraisal due to high cost, make sure this is worded correctly in the contract. I have recently had a buyer decide to not order the appraisal until after the inspection period is over, which is getting close to the close date, while appraisals in our area are 30 days out and threaten to end the deal. Something that could've been avoided early on.

On the PM side, Large properties or an accumulation of properties can be a daunting task. The Landlord Tenant Act, at least in Alaska can leave very vague opportunities for tenants to find holes in your lease. Having the right structure to your lease, wording, follow up, inspections is crucial especially in our cold climate where freeze ups are an unfortunate normal. Cheaper is not always better! Having a good PM involves not just finding you a tenant! Follow up due to non payment by the tenant, proper maintenance, key monitoring (I hate keys! We strongly suggest all owners to switch to a keyless deadbolt with a blank handle), accounting (I've seen transfers from another PM and there is OVER $10K MISSING!), and leases that are all properly signed and dated are all big parts when you are looking for a PM! 

Lastly one of the biggest thing that gets over looked, especially on properties where utilities can not be separated. Get an average and do a utility charge back. This is never done on ANY property we have ever taken over management on. Sellers can be losing out on tens of thousands of dollars on previously uncollected return. 

Make 2024 the year of returns! - Jerry

Investment Info:

Small multi-family (2-4 units) hard money loan investment.

Purchase price: $312,000
Cash invested: $80,000

older 4 plex

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

passive income

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

FSBO on FB. I am a realtor and worked it out through text

How did you finance this deal?

FHA loan

How did you add value to the deal?

Have updated to some degree. Switched to Natural gas

What was the outcome?

Rented have gone up 25%