First out of state deal, first 1031 exchange, first larger multifamily, oh- and first auction- all in one!

[Jean Bolger]

well, this has been an exciting time! I sold my triplex in Denver that I have owned for about 12 years (which, btw, I never would have bought if I knew then what I know now, thanks to BP...) I was trying to maximize my 130k in 1031 exchange money so I started looking out of state- ended up focusing on Ohio.

I flew out to Columbus a few weeks ago to check out an auction property and today I was the winning bidder on 29 one bedroom apartments in five single story brick buildings. Final price 330k. It's currently bringing in 86k GOI with only 20 units occupied. Once the remaining units get filled that jumps to about 125k at current rents. (oh, and tenants pay utilities --including water...)

There is still so much to be done that it feels a bit premature to be posting this under "success stories", but I am excited and relieved and wanted to share! I would never have had the cajones to proceed with this without all the stuff I have learned on BP. I couldn't possibly name all the folks here whose posts have educated and/or inspired me, but you have my thanks! Now I'll start hitting you up with questions about how handle what I've gotten myself into :)

[Joel Owens]

Jean was this an absolute auction??

If you are the winning bidder but there is a reserve or other approval it doesn't mean you will get it for that price. Sometimes the seller rejects, counters, or accepts the deal the way it stands.

Not trying to be a damper but I am sure you have checked on this before hand.

Is the area the 29 unit in nice??

Of the 20 units that are paying what about how "seasoned" they are?? For instance I would care more about 60% occupancy with many being long time payers on time and keep the place clean versus a seller that touts high occupancy and they slammed a bunch of crap tenants in there.

New tenants are like a new note in that they are not seasoned and you do not know how the tenants will act over time yet for the cash stream.

Are the current rents above market, below market, or in the middle?? You have to know if a market has had declining rents but people have stayed you might not be able to push occupancy up using those rents. The overall rent rate charged might have to go down to increases occupancy in that situation.

Let's say 125,000 is accurate.

125,000 / 2 = 62,500 NOI 625,000 sales price at a 10 cap when exiting. The key is to know what exit caps are averaging in that area.

This does look like a great deal from what you have posted.

Congrats!