Made the leap to commercial real estate!

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Made the leap to commercial real estate!

Account Closed
Investor · Cleveland, OH · Member since 2015 · 150 posts · 58 votes

I have been investing in SFR for a few years now and I have always had my sights set on acquiring an apartment building. I closed on my first 8 unit apartment building a few months ago, although there is still a lot of work to be done. This is a success story for me just for finally getting over the hump and getting my foot into commercial real estate.

There have been a few bumps in the road but thankfully I have an excellent property management team who has lifted a lot of burden off my shoulders. 

Already saving and looking for the next one, hopefully in the area of a 15-20 unit 

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  • Peter MckernanBusiness Member
    Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
    9y

    @Account Closed Congratulations on getting into investing in apartment buildings! That is a major goal of mine as well! What was your biggest challenge of getting to invest in that eight unit apartment?

    The McKernan Group4.954 Reviews
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  • Account Closed
    OP
    Investor · Cleveland, OH · Member since 2015 · 150 posts · 58 votes
    9y

    @Peter Mckernan Biggest challenge - finding a lender that had a low enough minimum threshold that also had reasonable terms I could make work. This purchase was sort of an awkward in between property as far as lending. I found a lot of lenders who were looking for at least 500k or 1 million purchase price.  Hard money lenders were willing but interest rates were outrageous.

    Good luck! Feel free to reach out anytime if you need anything. 

    0Reply
  • Tony SanFilippo
    Real Estate Investor · Littleton, CO · Member since 2013 · 197 posts · 77 votes
    9y

    @Account Closed 

    Congrats on the first Apartment building!!  Sounds like a great deal!

    How did you finance the purchase and rehab? Hard money, private money, personal funds?

    Also, how did you find this deal? Wholesaler, MLS, other?

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  • Peter MckernanBusiness Member
    Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
    9y

    @Account Closed Great insight! Thank you! I will reach out if I hit some walls.

    The McKernan Group4.954 Reviews
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  • Account Closed
    OP
    Investor · Cleveland, OH · Member since 2015 · 150 posts · 58 votes
    9y

    @Tony SanFilippo  

    Took my partner and I some time to find a lender but ended up finding a small local bank that does commercial loans. Obviously the numbers are number one but they are big on relationships and working with people they trust so we sat down with the president, branch manager, and underwriter and sold ourselves. 

    Found the deal on the MLS

    0Reply
  • Grace Jordan
    Brooklyn, NY · Member since 2016 · 71 posts · 21 votes
    9y

    Congrats @Rob McFarland! 

    0Reply
  • Michael Le
    Developer · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes
    9y

    Congrats. You've achieved what a lot of people here are still hoping to do one day.

    0Reply
  • Kaz M.
    Member since 2016 · 161 posts · 31 votes
    9y
    Wow! That sounds awesome Rob. I will want to do that some day. Are there any KPI you can share?
    0Reply
  • Account Closed
    OP
    Investor · Cleveland, OH · Member since 2015 · 150 posts · 58 votes
    9y

    @Michael Le Thanks!

    0Reply
  • Account Closed
    OP
    Investor · Cleveland, OH · Member since 2015 · 150 posts · 58 votes
    9y

    @Kaz M. KPI are you looking for key performance indicators? We had set criteria we were looking for, most import was cap rate, current rents, and location.  The market we were looking in we set the minimum cap rate at 8%. We did not want a major rehab or renovation but we did want to find a property that the landlord was charging rents that were under competitive market rates. Location we wanted access to the major highways and not in a "D" or "C" neighborhood. 

    My partner and I grew up in the area where we invested so it made it easier on us finding what we were looking for. 

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  • John CasmonPro Member
    Cincinnati, OH · Member since 2013 · 1k+ posts · 1k+ votes
    9y

    @Account Closed Congratulations! Where is the 8-unit? Are you self-managing?

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  • Account Closed
    OP
    Investor · Cleveland, OH · Member since 2015 · 150 posts · 58 votes
    9y

    @John Casmon suburb outside of Cleveland, OH. I have a property management company that has been doing some great work for me. 

    0Reply
  • Matt Motil
    Rental Property Investor · Cleveland, OH · Member since 2015 · 1k+ posts · 880 votes
    9y

    congrats bud! Happy for you 

    0Reply
  • Account Closed
    Commercial Real Estate Broker · Westlake, OH · Member since 2016 · 17 posts · 12 votes
    9y
    I know of 3-4 lenders in town that would be more than happy to assist you on transactions and/or refis when you get to that point. Feel free to reach out should you need a reference.
    0Reply
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