All Forum Posts by: Scott Huggins

Investment Info:

Large multi-family (5+ units) commercial investment investment in Sellersburg.

Purchase price: $1,900,000

This 28 unit townhome style property was a mom and pop managed property about 20-30 mins outside Louisville, KY. The property itself was in great condition and well maintained. As a result of the poor management there were several operational value add opportunities that we were able to capitalize on to immediately increase cashflow and increase the asset value for our investors.

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

It was a mom and pop managed property that presented some operational deficiencies and rents that were 10% below market. We saw an opportunity that we could resolve and realize an immediate increase in asset value and cashflow for our investors.

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

Off market deal brought by a broker connection.

How did you finance this deal?

Freddie Mac loan with investor syndication for rest

How did you add value to the deal?

Increased rents, implemented RUBS, cut expenses,

What was the outcome?

Implementing our management plan now

Lessons learned? Challenges?

Smaller properties dont have a lot of room for error so shop around for a good PM and insurance carrier and make sure your payroll expense is on point.

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

No

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Yes, we will be there next week and highly recommend. We went last year and got some one on one time with Emmett Smith and made some great contacts that escalated our business. One of the best networking events for multifamily I have been to besides maybe the Wislon Family Office events.    We may be presenting a deal in the Florence area but just the networking alone is worth it. Think one of our partners at Clearnnote Capital will be sponsoring a table which is another great way to network.  Little secret if you book next years  event while there it is much cheaper.

Agents please add your commission to the price.

Going on the MLS soon.

Assignable contract.

Agents please add your commission to the price.

We have too many properties and need to wholesale this one.

Text me for more pics and access.

We have too many deals on the table so need to wholesale this one.

Text me for pictures and access.

Just to give an short term rental owner point since there is a lot of fact-less, miss information, emotional and fear driven arguments going around. As a short term rental owner we abide by the current ordinances and laws (yes even parking), pay all the appropriate taxes btw yes we do pay state and local occupancy taxes just like hotels do also, we also actually pay about triple the property taxes that a normal home owner does for the “privilege of renting our own property”, we take better care of our properties than most property owners around us, clean and maintain our properties weekly, we screen the people we put in our propeties also (my felony neighbor that moved in next to me I have no control over btw). We have systems in place to monitor our propeties 24/7 like video and in fact have even had other neighbors come to us asking for our help and video coverage for unrelated issues on their property. We actually enjoy meeting the different people that stay in our properties and even had a CBS reality show filmed at one of our properties recently. As an owner the only real negative experience I have had is from the folks that think they have to right to tell me what to do with my property. Do we have an occasional guest that thinks they don’t need to follow the rules of course but we handle it just like I would think you of any guest that comes in your home.

Joseph

I think you and the agent both just learned valueable lessons so file that away and learn from it and remember it on your next transaction.  I am sure I speak for most in this business that we all made our fair share of mistakes and it is part have of the learning process.

Putting my agent hat on always assume unless you hire a buyer agent that the other agent works for the seller and that will help keep things in prospective. As such that seller agent and has his sellers best interest in mind.  

Hire a commerical buyer agent to walk you through your next transaction or two.  I have been in real estate for many years and I don’t hesitate to hire an agent or attorney in another market to be my boots on the ground and work for me and look out for my best interest so no shame in doing so.  Most of the time it can mostly be paid for out of the seller agent commission too.

In real estate signed written agreements always supersede anything else in real estate transactions.  Also commerical real estate doesnt offer the same protections as residential and due diligence burden is on you as the buyer.

Know whether business days or calendar days are being used and stipulate it in the contract.

Sellers and buyers can back out of a transaction up to the day of closing.  Whether or not pursuing a breach of contract claim is worth the time, money and sleepless nights, we’ll that is a horse of a different color.  

I don’t think the agent acted with malice or ill intent but maybe could have handled it better sure.  

Originally posted by @Tyler Watts:

What type properties are you looking for and I may know some agents that can help

 Tyler

I am interested in purchasing several multifamily properties 10-400 doors in the Greensboro, Winston Salem and High Point Triangle.