Small multi-family (2-4 units) commercial investment investment in Leominster.
Purchase price: $325,870
Cash invested: $65,174
We bought this 4 family as part of of a package of 8 properties totaling 23 units based on a 8% CAP Rate. They were all 4 units or less so we told the bank that the highest and best use was as residential properties. They did they did 8 separate residential appraisals using comps and that created over $500,000 of instant equity. Purchased for $1,850,000 and together they appraised at $2,356,000. We are now in the process of carving off and selling some of the under performing properties from a cashflow perspective, and recapturing the equity to be used in the next deal.
What made you interested in investing in this type of deal?
We recognized the opportunity since we do alot of multi-family deals in this area
How did you find this deal and how did you negotiate it?
MLS - we ended up paying $50k over asking but got them to handle 1 eviction for us
How did you finance this deal?
Commercial financing with Jeanne D'Arc Credit Union (JDCU)
How did you add value to the deal?
Converting it from 1 Commercial Portfolio to 8 Residential properties
What was the outcome?
Significant equity on day 1 e
Lessons learned? Challenges?
There are still good deals on MLS you just need to be able to look at things from a different perspective.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
We at Candor Realty represented ourselves as buyers agent but we used Doug Mercurio out of North Reading as our attorney and the Commercial Lending Team and Jeanne D'Arc was great. The benefits of being agents ourselves is that we have a Rockstar team in place.
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