Seller Financed a 120 unit apartment

[Todd Dexheimer]

We recently purchased a 120 unit value add apartment community and got the seller to finance. This was a distressed asset with 78% occupancy, needing over $500k in renovation. The option was to close with a bridge loan or to convince the seller to be the bank, saving us close to $350,000 in fees and interest. 

This deal was an off-market deal that my company put under contract and convinced the seller to finance a construction type loan. We syndicated the down payment and remaining renovation budget as well to make this deal what I think will end up to be a really solid investment. 

You can read more here: https://www.biggerpockets.com/blogs/10145/76815-se...

A few things that I took from this experience: 

1. Don't give up - ever!

2. Stay persistant

3. Be creative

4. Ask! Then convince and repeat #1-4

[Ray Johnson]

@Todd Dexheimer Congrats!

1) What's your Exit strategy on this asset? Short-term hold, long-term hold

2) Since this is a Seller Financed deal, What does your IRR number look like? Doesn't have to be exact, I'm just curious with this deal structure.

3) I see you're doing Interest only up to year 3, What's your debt structure plan going forward if you're holding past year 3?

4) The asset is 78% Occupied at acquisition, At what point are you projecting 95+% occupancy in your IRR?

5) Did you uncover why the previous owner was at 78% after 3 years and only at 50% of the rehab?

6) Is this asset a "C Class" staying "C" or are you taking a "C Class to B-Class?

7) What part of the US is this asset located in?