Super leverage, long play, short term down market moment - played like a pro

[Tommy Ray]

Investment Info:

Large multi-family (5+ units) buy & hold investment in Clarksville.

Purchase price: $330,000
Cash invested: $1
Sale price: $820,000

This was a zero down deal. I did pledge assets to cross collateralize. Contrarian investor play. Sold 820K 8-plex in Clarksville bought with collateralized assets. Make those dollars do double duty.

What made you interested in investing in this type of deal?

the 101st Airborne had taken an entire division to go fight Iraq in 2003. I knew those many tenants leaving would cause a problem for less experienced landlords.

How did you find this deal and how did you negotiate it?

I asked my habitually aligned buyers agent to locate a 5 unit or more deal. He found it in his office w/I hours.

Lessons learned? Challenges?

I used F&M Bank there in the same town to give me the full purchase price of 325k. I pledged the deed to a townhome I owned free and clear as well as the promissory note owed me on another property as additional collateral. Soldiers returned about the time I closed. Door rents went from $495 a door to $640 a door in a few months. At the end of one year I paid for an appraisal documented my 20%++ in equity and got my collaterals back.