Large multi-family (5+ units) buy & hold investment in Tavares.
Purchase price: $295,000
Cash invested: $400,000
Finishing up a major renovation for my first deal. Converting a mixed-use property into a 5-unit apartment complex in downtown Tavares, FL.
The original structure is one of the oldest properties in Tavares (1920's) and was added onto in the 1970's and then again in the 1990's. It was a mixed use building consisting of 3 offices and a 2-car garage downstairs, a 3/2 single family home upstairs, and a detached office/single car garage.
What made you interested in investing in this type of deal?
I was looking for a 5+ unit deal and couldn't find anything for sale in the areas I was looking that met my criteria. So I thought outside the box and took on a huge renovation. I've learned a TON (mostly what not to do and what I should of expected haha).
How did you find this deal and how did you negotiate it?
MLS. It had been on the market for over 180 days with no real interest. I checked the tax records and noticed 2 years worth of back taxes so I figured they would accept a low ball offer. It was on the market for $395k and I offered $260k. After inspections and a few weeks of negotiations we settled on $295k.
How did you finance this deal?
I financed the house purchase first and the construction loan after the demo was done and the final set of plans had been developed and approved. COVID really slowed down the process. It took me over 6 months to get my MEP plans.
How did you add value to the deal?
Converting a Tavares eyesore into what will soon be the nicest place to live downtown.
What was the outcome?
I'm 60-90 days from completion. All of the MEP inspections have passed and insulation and drywall will be going in this month. My plan is to refinance the property once I have renters in it and have seasoned it for at least 6 months.
Lessons learned? Challenges?
- There's a reason a lot of experienced investors wouldn't undertake a deal like this (unknowns, delay's, and insane price increases on materials to name a few).
- Not getting all quotes in writing/extremely detailed sets you up for "miscommunication".
- The larger the rehab, the larger your "unknown tolerance" in the budget needs to be. All-in-all this project cost about $100k more than I expected it to.
- Value my time: I've spent hundreds of hours on this project.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Tammy Vinson - local real estate agent
Gail Baker - local lender
Both are amazing!
@Jonathan Jennings ! looking forward reading more about the progress of this project!
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