What's Your Most Successful Apartment Deal Ever

36 Replies

Originally posted by @Ola Dantis :

 Interesting thread to start... 

In the current cycle of a 150+ deal we acquired in Texas, and we are on track to hit our goal of 2.0x EM for our investors! 

 That's awesome my friend. 2X equity multiplier - wooo hooo! I am sure your investors are happy bro!

Congrats!

Originally posted by @Bjorn Ahlblad :

@Michael Ealy great thread lots of learning and experience here. I retired 4 years ago and we moved from Ca to the PNW. We have a 12 unit 2 story apartment building 8x2 bed and 4x1 bed plus garages. We also have duplexes. 

We bought the apartment building 2 years ago, paid 645k in cash. The gross rents were 78k at the time and the building had been very well taken care of. We have turned over half the units and done some cosmetic improvements each time as needed; basically paint and flooring. The gross rents today are at 106k and we have spent maybe 20k making some improvements. 

The CF is helping to fund our retirement. We are looking for another building to buy, even made some offers, but unfortunately there is not much around at a price we are willing to pay. We invest in our immediate area-max 1 hour away. Look forward to seeing more on this thread as it unfolds. All the best!

Awesome deal Bjorn! You've increased the rents $20K (almost) a year by making $20K in capex. Even if you get only $10K increase in NOI, you're looking at a 50% ROI.

Congrats man.

Any challenges you encountered and what did you learn?

Originally posted by @Junior Soares :

@Michael Ealy

I'm not on your level yet good sir but would love to share my best deal Thusfar.

It's a 4 unit complex located in central ohio in an upper C class neighborhood. We acquired the property off market in early 2017 for $105,000 with 50% occupancy. I purchased all cash in order to secure the off market deal and have since refinanced pulling out 70% of what I paid. Renovated each unit ($5k per unit) and paved a private 4 space parking lot at the rear of the building and rents are now at market. ($600 per unit)

Fast forward to today October 2019 and the property has maintained 100% occupancy and has been appraised at $180,000 positive cash flowing very nicely.

Lessons learned: trust but verify, there were some minor fibs from the contractor during renovation but after showing face and being a part of the project that quickly changed. As you mentioned you cannot run real estate from a desk. I personally visit all of my properties once per quarter.

Of all the properties we own, the ones that needed some attention that are most profitable.

We will likely sell within the next 5 years once the loan is almost paid off In order to trade up to the next one but for now, the cashflow is nice.

We're currently closing on a 4 unit in North Austin Texas this Thursday so hopefully a similar situation but on a bigger scale with the growth there.

Best of luck to all!


 

Awesome deal Junior. You got it for $105K, put in $20K in work, so total "all-in" of $125K and it's now worth $180K. On top of that you got $70K+ back so you have great Cash on cash.

And yes, it may not be as big as the deals I do, but...you're on your way bro! Pretty soon, you'll be dealing  with a $1M building, you put $200K in and it's now worth $1.8M. Just keep adding one more zero to the end ;)

Originally posted by @Michael Ealy :

What about the more experienced apartment syndicators like @Brian Burke , @Greg Dickerson , @Tj Hines , @Ola Dantis , @John Casmon, @Alina Trigub ...what's your most successful apartment deal ever? Please share it here so others can benefit from the lessons and be inspired by your success. Thanks!

Great post. We are two years in on our first large apartment syndication, which is on track to exceed investor returns and more than double their money. We've done about 5 more syndications since then with all meeting our expectations.

The best deals that have gone full cycle were our first two small multifamily properties. The first one, we almost doubled the value of the asset in about 2 and 1/2 years from $362k to $650k and the other we just painted one unit and sold it 3 years later for $140k more than what we bought it at.

Look forward to revisiting this when we put some seven-figure profits on the board!

Originally posted by @John Casmon :

Great post. We are two years in on our first large apartment syndication, which is on track to exceed investor returns and more than double their money. We've done about 5 more syndications since then with all meeting our expectations.

The best deals that have gone full cycle were our first two small multifamily properties. The first one, we almost doubled the value of the asset in about 2 and 1/2 years from $362k to $650k and the other we just painted one unit and sold it 3 years later for $140k more than what we bought it at.

Look forward to revisiting this when we put some seven-figure profits on the board!

 That's awesome John. It's always good to deliver what is promised. Your investors will come back to invest more for sure. That's why I advice people not to jump into syndications until they've proven to themselves they can make money with apartment investing using their own money first.

Originally posted by @Ivan Barratt :

The best deals I've done were the ones I passed on vs overpaying! :)

2nd Best: 2.5x net to investors in 3 years on a cash out refi.

 That's awesome Ivan. I am sure your investors are quite happy with that.

So, what are the challenges you encountered and what lessons do you like to share with BP Nation with your best apartment deal ever - or second best apartment deal ever? :)

@Michael Ealy

Absolutely brother I very much look forward to that. In my mid 30s now so wife and I plan to hold our bay area home a little longer and once it's at a point where it doesnt make sense to hold anymore we can sell and 1031 to trade up and grow and rinse and repeat. Slow and steady decent reserve so we dont lose our *** on the next downturn. I've only been doing this 5 years now which makes me a newbie still but I feel having reserves are very important and too many newer guys out there are over leveraging themselves with no reserves and I'm very scared for them.

@Alma Bagaoisan I heard about the property from a friend who owns a winery, hotel, and wine production facility in the town. The town is not one that would have investors flocking to it, or checks the boxes for increasing population growth, so the amazing price comes with a few challenges...and lots of room for creative thinking.

@Michael Ealy the one we were supposed to be closing on in a few weeks. Had to step away from it due to negligence of seller falsifying bank statements.

If everything came back to be true we were looking at a modest 10% CoC in the first year with 18%IRR conservatively C property in A- area on the golf course. Deal was sort of complex we found this gem under a rock. Upside was tremendous, but after reviewing the bank statements come to find out the deal was not cash flowing day one.

Originally posted by @Tj Hines :

@Michael Ealy the one we were supposed to be closing on in a few weeks. Had to step away from it due to negligence of seller falsifying bank statements.

If everything came back to be true we were looking at a modest 10% CoC in the first year with 18%IRR conservatively C property in A- area on the golf course. Deal was sort of complex we found this gem under a rock. Upside was tremendous, but after reviewing the bank statements come to find out the deal was not cash flowing day one.

 Thanks TJ for sharing. There are deals that don't materialize isn't it?

What about an apartment deal that actually went full cycle - acquired, stabilized then sold at a profit?

@Michael Ealy I made a full time transition back in Jan. of 2017 from SFR. Unfortunately, I haven't not taken a deal full cycle yet. But guys who I'm strategically aligned with have done so. Thanks for getting the buzz going my friend. I always enjoy your post.

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