Just bought a 78 unit disaster...
We just purchased a 78 unit property in the DFW area that had horrible management, tons of deferred maintenance, and 25 vacant units..... hope I don't regret it! Thought it might be interesting to those looking at multifamily??
Here are a few details:
-20 investors w/$25k-$100k each
-Purchase price: xxxxxxx (removed in case appraisal district starts snooping around!) Taxable value right now is about $2,300,000
-Loan: Full recourse 75% LTV (including 75% of $450,000 rehab budget), 5 yr term, 25 year amortization, 4.5% interest with interest only year 1
-Age: 1968
-Individual HVAC and Hot water heaters
-9 down units have been "down" since 2007!!
-Professional management w/1 full time manager and 1 full time maintenance tech
-Plan: Full exterior rehab, renovate all down/vacant units, move office from TWO units that are currently being used to the abandoned dedicated office that is down to the studs. After a year to 18 months, we'll look at a sale if the market is still crazy, or also consider a refi into fannie/freddie debt.
Most challenging deal I've encountered due to having virtually NO records from seller; so please don't ask what the cap rate was! Just know that it would be horrendously low based on actual numbers.
Most Popular Reply
@Tom Lafferty, after speaking with you and learning more about your strategy on this asset, I strongly believe you will be very successful with this opportunity.