All Forum Posts by: Sean Allen Fenn

ⓘ This is not an offer, solicitation of an offer, to buy or sell securities. Past performance is not an indication of future results. Investing involves risk and may result in partial or total loss. Prospective investors should carefully consider investment objectives, risks, charges and expenses, and should consult with a tax or legal adviser before making any investment decision.

We’re looking at a compelling value-add multifamily deal there. 

Property Overview

- 105-unit apartment complex built in 1977

- Mix of 1-bed/1-bath and 2-bed/2-bath units

- Location? Ask me privately.

Financial Highlights

- Gross Potential Rent: $98,061 per month ($1,176,732 annually)

- Total Income (5/1/2023-4/30/2024): $1,357,459.80

- Net Operating Income: $896,896.09

- Existing assumable loan: $6.7M at 5.38% fixed rate until 2029

Value-Add Opportunity

- Partially renovated property with potential for further upgrades

- Current loss-to-lease suggests room for rent growth

- Opportunity to implement operational efficiencies

Market Dynamics

- Huntsville's population grew 9.4% between 2020 and 2023

- Strong job growth, particularly in aerospace and defense sectors

- Significant multifamily supply growth (15.9% inventory expansion in past year)

Investment Strategy

- Assume existing favorable financing

- Implement value-add renovations to drive rent growth

- Capitalize on Huntsville's robust economic expansion

- Target hold period: 3-5 years to align with loan maturity

Risks and Considerations

- High market-wide vacancy rate (17%) due to recent supply growth

- Potential for market softening due to rapid inventory expansion

- Property age may require significant capital expenditures

This opportunity offers a blend of stable cash flow from the existing operations and upside potential through strategic improvements, all underpinned by Huntsville’s strong economic fundamentals.

 Seeing this after sending you a DM about it. That makes perfect sense! My intention is to start corresponding with them. The objective is to be top-of-mind if and when things change. The owner isn’t motivated now, but anything can happen, right?

We established ownership. Calling the management company was only to start figuring it out. If we can find the owners' contact info (LLC), what if we ask them? For instance, not send the LOI, but make contact. Ask if they wouldn't be opposed to receiving an offer?

Speaking of TN, we found a property that's off-market there. It hasn't traded since 2008. You can understand our inexperience. We do have our buy-box clearly defined, which makes this relevant. Before sending an LOI, we're missing information. It looks like 100 units, but we don't know for certain. I called the management company to ask. The person I talked to didn't want to tell me. She did give us permission to make an offer. My question is, what would you do in this situation?

 That makes perfect sense. Thanks. I appreciate you!

This is great! What if we are at step one? It’s our first deal. That makes “track record” an issue. Our buy box is ~ 100 units. Class B. in an emerging market. Based upon our data, we’ve identified the ideal market. My question is this:

I’ve heard of this tactic for finding brokers. Go to crexi or similar site. Find the properties in your market. Get acquainted with the broker for that property. Chances are, what’s listed won’t pencil. With that in mind, convince the broker to include you in the next off-market deal.

Who has done this?

They’re all alike?

Out of curiosity, you mentioned that your dream project is a solid fourplex. A fourplex is generally considered a single-family property for financing and regulatory purposes. What’s important to you about that?

This is great, thank you!