Investment Info:

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

Purchase price: $354,963
Cash invested: $45,000

New construction- two 3-story triplexes in historical downtown district of Thibodaux. Premium property location. Land cost was high, so we made the decision to build up to maximize profitability. This was my first new construction project requiring commercial and fire/sprinkler code construction methods. I design all of my own buildings utilizing Chief Architect software. Had to fully research additional commercial building codes, as well as required annual commercial inspections. Had an engineer review and certify plans, with no changes recommended. Tenants love this property, and I never have to advertise, as former tenants always find my next tenant. I literally never have more than 2 days vacancy to flip the unit. Class of tenant is very high in this property, with only minor touch-up painting required upon move-out. With $354,000 in building costs, the property appraises for $510,000. Year 5 Cash on Cash return is 29.9% with a 481.9% Return on Investment taking into account appreciation and debt pay down.

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

I have always dealt with new construction multi-family since prior to age 25.

How did you find this deal and how did you negotiate it?

This was the only vacant land in the downtown area to have come available in 20 years. The premium paid for land was more than worth the additional premium. Paid asking for land with multiple bids in on it. Maximized profits by building up.

How did you finance this deal?

20% cash down out of pocket on first building, with second building being financed using equity in the first building.

How did you add value to the deal?

Sub contracted all labor and construction

What was the outcome?

Amazing ROI!

Lessons learned? Challenges?

Lessons learned were additional costs and difficulties of building triplexes vs duplexes, as it relates to commercial building code and fire sprinkler system requirements.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Synergy Bank, Patrice Oncale, Thibodaux, LA