Large multi-family (5+ units) other investment in Winter Haven.
Purchase price: $7,425,000
Cash invested: $2,200,000
This walk-up, garden style property was built in 2001 and is comprised of 90 units in Winter Haven, Florida. It was purchased from the original builder as a stand alone deal.
The plan with this property was to make some common area improvements to the amenity package and update the units as they turn. There is a generous mix of 1, 2 and 3 bedroom units. The floorplans are very large and well appointed. There are full size washers & dryers in every unit. Property amenities include pool, outdoor kitchen, outdoor TV, basketball court, playground, business center, car wash, clubhouse, and fitness center. The average rent has increased approx. $265 per unit per month since we acquired it, easily beating our initial projections.
The property is financed with a Fannie Mae loan and we have completed one supplemental loan since acquisition to return a significant amount of our partners' capital.
We continue to hold the property in our portfolio.
What made you interested in investing in this type of deal?
We loved the growth the area is experiencing - it is off the charts! We really like the floorpans and amenity package which we were able to significantly enhance.
How did you find this deal and how did you negotiate it?
We found this deal through our deeply connected broker network. We had to work hard to make sure the seller knew we would deliver on our promise and we made the deal painless for both the broker and the seller. Two things that are key to success!
How did you finance this deal?
Fannie agency loan.
How did you add value to the deal?
Focused on the amenity package. Completely renovated the pool area, added an outdoor kitchen, outdoor TV, wifi, and all new landscaping.
What was the outcome?
Average rents are now up much more than $200 per month and still rising!
Lessons learned? Challenges?
Make sure you understand your market. Most buyers wanted to ignore this small market because it is small. This area is growing like crazy and has been one of our best performers. Just because it seems like a small market doesn't mean you can't make incredible investments in that market.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
We worked with Nick Meoli and Mike Donaldson on this deal (currently with Cushman & Wakefield). Top notch brokers!
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