Real Estate Deal Analysis & Advice

Best Deal Ever Show #20: $6.5M Purchase with Zero Out of Pocket

Expertise: Real Estate Investing Basics, Landlording & Rental Properties, Real Estate News & Commentary, Mortgages & Creative Financing, Real Estate Wholesaling, Personal Development, Flipping Houses, Business Management, Real Estate Deal Analysis & Advice
190 Articles Written
medium size apartment building with light gray cement exterior and lots of windows against a vibrant blue sky

Anna Kelley lives in central Pennsylvania, only five minutes away from the famous Hershey factory, currently owning and managing five different businesses. Anna began flipping single family homes and then eventually migrated to keeping some of her flips as rentals

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To give you some background, the Hershey market is quite diverse with lots of opportunity. Single family starter homes range from $150,000-$175,000 while new builds sell close to $400,000. Luxury homes sell anywhere from $450,000-$700,000. 

Ranging from singles, duplexes, vacation rentals, and now more recently, apartment complexes, Anna is no stranger to diversifying her portfolio. When a deal is the right fit and makes cash, she doesn’t hesitate to act. While most of her properties are in Pennsylvania, she also recently bought two apartment complexes in Atlanta and has big plans on making deals across the country.

The Importance of Paying Attention, Being Flexible, and Building Relationships

Anna’s recently changed gears, primarily focusing on multifamily investing. Her primary model is purchasing properties to renovate and raising a property’s value through interior and exterior upgrades.

In Hershey, Anna states that there hasn’t been an overwhelming amount of competition. But in recent years, that’s changed. There is more… and in order to get a really good deal, one needs to be willing to take on some of the more challenging properties. 

Her primary way of finding leads has been through word of mouth and building relationships with various attorneys, local brokers, and Realtors. By building these relationships, she’s been able to come across deals before they’ve hit the market.

Occasionally, she’ll also stumble across properties through auction websites and the local MLS. 

Related: How to Build a Lead Generation Funnel to Consistently Find & Close Deals

apartment-complex

This Investor’s Best Deal Ever

Anna’s best deal ever was the first apartment complex that she purchased. After hearing about it through an acquaintance, she immediately drove to find a 73-unit property with four storage units. The most incredible part was that the property was in excellent condition—just outdated. The interiors were clean, and to sweeten the pot, the roof, patios, and parking lot were new. 

To purchase the property, Anna would need to find a way to piece together $6.5 million. She was able to source $2.2 million in equity—with only two JV partners bringing all of the cash required into the deal.

Related: Best Deal Ever Show #19: Hidden Profits in Extra Acreage

With her partners, Anna was able to begin renovations and over the course of time, raise monthly rent to increase cash flow—all while increasing the property’s value and lowering operating expenses. To hear how Anna was able to keep 95 percent of tenants, raise rent, and meet her year 3 projections, watch the video above starting at the 15:25 mark.

Anna also talked a little about financing, saying that she doesn’t recommend using bridge debt unless absolutely necessary for a few months. For this property, she was able to get 30-year fixed interest financing, with a rate at just over 5 percent with 25 percent down. 

For those interested in how Anna structured a JV in the multifamily space, she talked about these key factors to keep in mind:

  1. Figure out what’s a win-win for everyone and be willing to swallow your pride.
  2. Understand the power of creating relationships and partnerships with others and understand that these partnerships can also mean you may have the opportunity to do another deal together in the future.
  3. Realize that you don’t always have to be a “Lone Ranger” and that having partnerships also allows for others to bring their strengths to the table. This can help take some of the stress off the purchasing/flipping process.
  4. Partnership opportunities also can bring larger potential returns.
  5. Be creative, flexible, and willing to negotiate your deal because of key factor No. 1.

Have you considered partnerships while investing? What interests you about apartment complex investing?

Let us know below!

Ken Corsini is a seasoned real estate investor and business owner based in Woodstock, Georgia. Ken is best known for his role on HGTV’s hit show “Flip or Flop Atlanta,” and has flipped over 800 hou...
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    Trenton Parks Developer from Billings, MT
    Replied 11 months ago
    Awesome show, for the agency financing, who did you contact for this kind of financing? I also live in a smaller metro (150,000 population) and local banks typically do not broker it.
    M P. from frisco, TX
    Replied 11 months ago
    How do you find numskulls to invest when you have no skin in the game, and get a 6 figure acquisition fee? I’ve been doing multi family for years and would never even think to approach my investors with a deal structured like this.
    Dylan Nelson Lender from Salt Lake City, UT
    Replied 11 months ago
    Awesome deal highlight! I love it when borrowers can bring little or nothing into the deal and make a killing! @Trenton Parks depending on your deal size there a few national bank and credit unions who should be willing to loan on your property. Agency financing will look if the loan amount is at least $1.3m+ If you have any questions feel free to reach out.
    Robert Newcomer Lender from Orange, CA
    Replied 11 months ago
    I don’t believe we are getting the whole picture here? No skin in the game. Who is the rich uncle?
    Andrew Syrios Residential Real Estate Investor from Kansas City, MO
    Replied 10 months ago
    Great show!