First acquisition in Columbus, OH!
Investment Info:
Large multi-family (5+ units) commercial investment investment in Columbus.
Purchase price: $1,400,000
Cash invested: $342,500
36 units of 2/1 town-home style apartments in Salem Village. Class C area and building. This was a joint 1031 where my Partener and I took titles as TIC. Originally went under contract for $1,872,000, but we were able to negotiate discount given the COVID-19 and economic uncertainty. The current average rents are $587 but market rents are $750 after renovation. We got $150K in LIP account for exterior and interior renovations. The plan is for 18 month stabilization.
What made you interested in investing in this type of deal?
I had a triplex and a SFR. I was thinking of getting another 3 or 4 units, but people from Bigger pockets, encouraged me that apartment investing is within my reach and is more scalable. I did some research and also came to the conclusion that it was doable. With my partner, we did a lot of reading and research, met and networked with a lot of people, and built a team in Columbus, OH to consummate the deal.
How did you find this deal and how did you negotiate it?
A broker brought the off-market deal. Initially we went in contract for a lot higher, but we were able to negotiate lower prices based on inaccurate financials that we were given, and also because of the covid-19 impacts on the economy.
How did you finance this deal?
We got a local bank to finance it at 3.58% swap(hedge), 10 year term, 25 year amortization, 12 months of interest-only, 3-2-1 prepayment payment, full recourse loan. We also got $150K of LIP account for rehab budget. 75% LTC.
How did you add value to the deal?
We are going to fix the parking lot, paint porch ceilings, improve landscaping with box woods and mulch around the buildings, and improve interiors by replacing old appliances and upgrading bathrooms.
What was the outcome?
We just got it and it's a work in progress.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Paul McHugh has access to a ton of off-market deals, and he was very professional and prompt throughout the whole process. We were happy with how he was able to advocate/negotiate on our behalf, and would highly recommend him. He's a closer and a go-getter. @Dave Foster has been extremely helpful answering all our questions and helped us execute this deal.
