20 unit apartment building with no money down!

42 Replies

I've been in real estate management and investing for 9 years and I have a recent acquisition that I hope will motivate others.  I've been sitting on the sidelines too long, it's time to contribute!

I sent out 600 letters to local owners of multifamily properties and had quite a few calls from the letters.  Sent them 3 times before I reached the right owner on the right day, where he was just mad enough about landlording to want to sell his property.

20 Unit apartment complex

Purchase Price: $285,000 (approx 15k unit)

30 year amortized loan 5% with a 5 year call (100% owner financing, but he did take a 2nd mortgage on another house I own)

Tax Return NOI average: $32,000 over the last 4 years

Expected NOI after proper management: $50,000

Equity after stabilized: $100,000-$150,000

As purchased the property cash flows around 1k a month with no money down!  After the property is stabilized it will net around $2500 a month.

Bonus:  There is a back lot that came with the apartment complex and is of no use to the operation of the complex.  I have it under contract for $72,500 cash.  Pending zoning approval this lot will be sold and I will be able to put some cash into my pocket.

Thanks for reading my deal!  I hope this motivates some people that these deals do exist.  I can't wait to read some of the comments.

Rob

Congratulations ! Can you share more on how did you go about sending letters. How did you get the information and How and where did you got the letters? Look forward to hearing more on this.

Thanks

Himanshu

Originally posted by @Himanshu Jain:

Congratulations ! Can you share more on how did you go about sending letters. How did you get the information and How and where did you got the letters? Look forward to hearing more on this.

Thanks

Himanshu

Sure I will share!  I got the list from list source and had someone handwrite the envelopes for all of the recipients.  The letter was on my company letterhead. It was a very personal letter that explained who I was and that I was looking to expand my portfolio and to please call me if they were looking to sell.  I got a lot of phone calls from the letters.  I will continue to do them in the future!

Can we see a copy of the letterhead to read the verbiage that you use? Much appreciated!

Originally posted by @James Enright:

Can we see a copy of the letterhead to read the verbiage that you use? Much appreciated!

Here ya go:

I’ve spent a significant amount of time researching multifamily communities, and have identified your property as one I would possibly be interested in, should you have the desire to sell it.

My name is Rob Wilson and I’ve been lucky enough to take over my family real estate business, which I’ve been working on for the past 8 years. I’m looking to expand our business and am seeking an opportunity where I can use my hardworking management team to help provide affordable housing.

I am in a position to move quickly if the right opportunity presents itself. I am interested in finding units that meet my long term goals, which include purchasing low to moderate income properties, located in Charleston South Carolina, containing 4-100 units.

I have the financial backing to pay cash for your property, but I am also willing to discuss land contracts, and other creative financing should you be looking for interest income or other ways of creating cash flow.

Most importantly, should you have the desire to sell; I am willing to pay a fair market price for a property that fits my investment goals. Please contact me at [REMOVED] or by email [REMOVED] if you would like to discuss the sale of your property.

Have a great day,

Rob Wilson

PS. Vacant properties in need of rehab are OK!

Congratulations!  Great find!  Direct mail is such a great tool that is not really leveraged by many people.  I was a real estate agent in another state some time ago and one of my key lead generation techniques was direct mail.  It really worked well for me.  Not only due to the call backs I received, but also because when I cold called the area most people knew who I was since they had received my mailers a few times.  Way to go!  I'm hoping to get back into real estate over the next several months and will definitely have direct mail in my strategy.  Wishing you continued success!

@Rob Wilson , congratulations on your acquisition! Your line "Expected NOI after proper management: $50,000" is a great highlight since some property owners I know are only in the business of acquiring a big portfolio, and not managing it to give it added value to the tenants and community. Best, Sandy.

@Rob Wilson  

  did the seller of the apartment just release the extra lot with no pay down on his mortgage?  If so that was a pretty good deal for you and not so good of deal for the seller.

I would have thought since the seller got additional collateral from you that he would have been savvy enough to at least get a portion of what you sold the lot for as a pay down on his note.

PS I just got introduced to Charleston one year ago.. and since I have done 4 fix and flips and have 6 new homes under construction in the wagner terrace area .

I was just there last week... And I live in ORegon.... so could not e doing business any farther from home

Originally posted by @Jay Hinrichs:

@Rob Wilson 

  did the seller of the apartment just release the extra lot with no pay down on his mortgage?  If so that was a pretty good deal for you and not so good of deal for the seller.

I would have thought since the seller got additional collateral from you that he would have been savvy enough to at least get a portion of what you sold the lot for as a pay down on his note.

PS I just got introduced to Charleston one year ago.. and since I have done 4 fix and flips and have 6 new homes under construction in the wagner terrace area .

I was just there last week... And I live in ORegon.... so could not e doing business any farther from home

 Jay,

Man, that's great you're down in my neck of the woods.  I love it down here!

The seller and I negotiated to give him 10k of the sales proceeds and then I'll pay off my other SFR 1st mortgage with a portion of the proceeds and give him a 1st on that house instead of the 2nd he currently holds. Gives him a little more security. This seller has been really great and I feel we are working this deal to each others mutual benefit. I'm sure he would've liked more of the lot sale, but he was willing to let me have it and I can sure use it to grow my business, which I think he appreciates.

Congratulations @Rob Wilson  

Welcome to the Forums!

Those are some good looking numbers. Sounds like you found a winner. What type of areas are you targeting? I would assume based on the purchase price, its either rural or in the hood. Are you managing it yourself?

Best of luck with it.

Originally posted by @Patrick H.:

Congratulations @Rob Wilson 

Welcome to the Forums!

Those are some good looking numbers. Sounds like you found a winner. What type of areas are you targeting? I would assume based on the purchase price, its either rural or in the hood. Are you managing it yourself?

Best of luck with it.

 It's low income property.  I've always grown up managing low income property and find myself gravitating towards it.  When the economy took a huge hit my occupancy percentage on the residential portfolio stayed at 95%, I can't say the same for my commercial buildings.  I also feel more comfortable with lower income tenants because they are easy to train.  If you get a good person with a good work ethic they just need to know your expectations.  Maybe since this is all I know, I don't know what I'm missing, lol.  But, It works pretty well for me.

Thanks for the question

So you got 100% financing at 5% amortized over 30 years? Thats a heck of a deal. What was the previous seller's motivation behind wanting to sell?

Originally posted by @Matt Morgan:

So you got 100% financing at 5% amortized over 30 years? Thats a heck of a deal. What was the previous seller's motivation behind wanting to sell?

 I'm sorry I was looking over my deal, it's a 20 year note instead of a 30.  It has a 5 year call on it so I'll have to find some other debt in a few years.

The owner was just a tired landlord.  What made this deal so palatable to him was the fact that when he bought the property he also bought it 100% from the previous owner, so he knew where I was coming from. He since has paid it off and owned free and clear.  He just wanted out and good cash flow with no hassle was right up his ally.

Congratulation! Rob great  leverage.

congratulations Rob, that is a great deal!

Awesome deal man. Keep it up.

Regards, Edwin

@Rob Wilson  Congrats on such a good deal.  Also good to see other investors on here from SC.  This definitely gives me some more motivation and hope for finding good seller financed deals.  I have been frustrated lately with the banks asking for 25-30% down payments, gets expensive quick, trying to pick up our 5th rental now.

JW- Aiken, SC

Originally posted by @Jon Klaus:

Good job, Rob. Excellent use of direct mail for finding your deal. How long did the marketing campaign take?

It took about 3 months before I talked to the right person.  Along the way I met some great local investors and found my maintenance crew from another apartment owner.   I also got a much better feel of the local market occupancy and rents.

I'm planning to launch another mailer within 30 days because of how much this last one brought me. 

Thanks for all the kind comments. 

Rob

@Rob Wilson congrats on your deal. Would you mind telling us how you implemented list source to generate this lead? Like what package did you buy how many names did you get, how many letters did you sell, how many calls you got, etc? 

What was your total investment in the list source info?

Thanks

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