Investment Info:

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

Purchase price: $1,000,000
Cash invested: $50,000

Our 13 unit apartment building.
Listed $1.1M: 12 units + single-family house on same lot
Vacant 4800 sq ft separate tax parcel included. All but one unit
occupied — but financials a disaster.
The “manager”
(maintenance guy) was:
 Collecting cash rents
 Pocketing for repairs
 Depositing leftovers into sellers’ account
 Zero records
Schedule E showed $3250/month gross. Reality: market rents
$10,500–$12,000. Current actual rents $6,500/month.

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

Diversifying in the market

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

It was listed in the MLS and went back on after a another investor backed out. Seller
faced massive recapture tax hit on sale.

How did you finance this deal?

Creative Structure ($70k out of pocket on $1M purchase):

$50k HELOC
 $20k commission repurposed -I was also the buyers
agent

 $600k seller-carried 1st (6%, interest-only, 2-year
balloon)
 $330k seller carried silent 2nd (0 payments, 3-year
balloon)


How did you add value to the deal?

Year 1 Actions:
 Changed Management
 Legal rent increases
 Renovated turn overs
 Online collection
 Added pet fees and Insurance
 Renter’s Insurance
Gross → $10,800/month in 10 months.
Year 2 Projection: $1.72M value. Refinance pulls capital +
profit → next deals.
Over $1M wealth created in <36 months — because we solved
the seller’s problem and executed the framework.

What was the outcome?

We have been able to raise rents, add rubs, and even doing so in the newly added Washington state rent cap environment.

Lessons learned? Challenges?

The initial numbers are never the final ones.

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

My husband and I Realtor and Mortgage broker team. We did it. And do it for our clients.