7 Unit Mixed Use for $260,000
Investment Info:
Other commercial investment investment.
Purchase price: $260,000
Cash invested: $65,000
3 retail units and 5 residential units. Rents are significantly under market rate at the time we purchased them. We should go from $2200 a month to close to $4000 a month when we adjust the rates.
What made you interested in investing in this type of deal?
I like multi-unit properties. This is my first "commercial building" purchase.
How did you find this deal and how did you negotiate it?
A local realtor brought it to me before it went on the market knowing that I was looking to buy something.
How did you finance this deal?
Commercial loan through credit Union with 25% down.
How did you add value to the deal?
All we need to do is to adjust the rents to market value. Is was bringing in $3600 a month gross and by adjusting the rents we can get it to $6100 a month gross.
What was the outcome?
We are in the middle of meeting with the tenants to get new leases signed. We are not jacking up rents immediately, however, we will start adjusting them upwards over the next 18 to 24 months.
Lessons learned? Challenges?
Our lender was really slow so the next time I will do more due diligence on picking a lender. Also, there were some costs that I had not figured in which were seller paid utilities on some of the units and dumpster fees.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I am an agent myself and I work with investors also. In this case, a fellow agent brought this deal to me.