Multifamily Investment Lake Highlands Dallas area

Real Estate Deal Analysis & Advice
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Multifamily Investment Lake Highlands Dallas area

Buck MaxeyPro Member
Member since 2022 · 1 post · 2 votes

Investment Info:

Large multi-family (5+ units) commercial investment investment.

Purchase price: $32,000,000
Cash invested: $75,000

Low B/High C value add multifamily

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

Future Cash flow and appreciation

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

Existing Multifamily investing network

How did you finance this deal?

Floating rate debt with rate caps

How did you add value to the deal?

Unit and various exterior upgrades

What was the outcome?

So far, very poor. Lead investors recently have initiated cash call to extend loan past lock period, waiting for market to stabilize

Lessons learned? Challenges?

2022 was VERY poor time to invest in Multifamil, in spite of EXTENSIVE experience and what appeared to be conservative underwriting.

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

NO

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  • G. Brian DavisPro Member
    Investor · Hatboro, PA · Member since 2016 · 3k+ posts · 891 votes
    8mo

    Hi @Buck Maxey, Sounds like a tough lesson in timing and market cycles. For deals like this, I’ve found stress testing cash flow under multiple interest rate and vacancy scenarios upfront can save headaches later. Also, layering value add improvements with realistic rent growth projections helps distinguish potential winners from risky bets. Treat the cash call as a chance to reassess priorities, focus on the upgrades that deliver the fastest return, control expenses tightly, and make sure all investors are transparent.

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  • Bruce Lynn
    Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
    8mo

    Who was the syndicator?

    This tends to be a very tough area.  It looks a lot better just driving by, then by actual tenant quality.

    I recently saw a pitch from a pretty good operator for what I am guessing is a very similar property.  While they have been a pretty good operator, I think they will be unpleasantly surprised by the reality of the area, the tenant base, and all the problems they are going to have in that general area.  Looks are very deceiving.

    There has been so much inventory added in DFW and even some in this area, that it has been tough going.  Some of the newer properties have been giving 2-3-4 months rent to get them leased up.  Good news is, DFW is still growing.  New construction has virtually stop.  Most of what was under construction is now complete and either leased up or should be nearing lease up.

    New construction prices still high for 1st time home buyers, interest rates still high, and newer construction fairly far away.  So hopefully it will improve over the next year or two.

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