Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $340,000

Purchased 8 unit converted motel on an owner hold in February 2019. Pro forma looks like it should be an 8 cap but that is yet to be determined since the largest most valuable unit was previously owner occupied, along with some vacancies. Hired a professional property management company to oversee leasing up vacant units and maximizing cash flow. Property is on two acres of land, so currently investigating additional ways to boost cash flow such as solar energy, separate garage lease, etc..

What made you interested in investing in this type of deal?

Was not very interested in investing in such a small rural market (Alden, NY), but a 10 year owner hold at 5.25% was attractive enough to pursue the deal.

How did you finance this deal?

Had an upcoming cash out refi for a previous investment property, so was able to borrow the 15% down payment from private investors who trusted that they would get their cash back once the refi closed. Remaining 85% was held by owner.

How did you add value to the deal?

Working towards 100% occupancy

What was the outcome?


Lessons learned? Challenges?

If the seller does not provide any of the information you are asking for in due diligence, assume the worst. I continually asked for a rent roll and proof of payments and neither were provided. This led to an eviction being needed within the first two months of owning the property.