10 Unit Multi-Family Acquisition

[Tim Cornwell]

Investment Info:

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

Purchase price: $1,730,000
Cash invested: $550,000

10 unit multi family building purchased with 5 members of our real estate agent team. We formed a multi member LLC.

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

Cash flow, upside, rents were low

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

It was listed on the MLS. It was pending inspection and came back on market on a Saturday. Wrote an offer immediately.

How did you finance this deal?

Bank financing

How did you add value to the deal?

Rents at the time were well below market. Used the income approach to value and met the DSCR requirements of the lender and were able to negotiate a price lower than list price with the seller.

What was the outcome?

Increased rents over the past 3 years to market rent and thus increased the NOI and value of the building by 50%

Lessons learned? Challenges?

Should have locked into a fixed rate loan instead of floating. Got hit when loan reset but fortunately still has strong cash flow.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am an agent and did my own deal! I used a local lender called SaviBank and they did a great job. I do have to give credit to what I've learned from Grant Cardone about investing in apartments.

[Tim Cornwell]

Jaycee,

I believe we were at a 1.25 DSCR. We have not re-financed yet. Waiting for rates to drop