Updated almost 6 years ago on . Most recent reply
Multi Family Cash Flow Monster
Investment Info:
Large multi-family (5+ units) buy & hold investment in Eastpointe.
Purchase price: $1,555,000
Cash invested: $400,000
32 Unit Apartment Complex with significant upside. Purchased with 1031 money, non-recourse financing, and an understanding of the market. Time will tell how far the rents will go!
Update: In a few short months since acquisition, 6, we have driven our rents from a per door average $660 to $810.
What made you interested in investing in this type of deal?
Made a goal to expand my multifamily holdings in 2018 to 100 units. A 32 unit purchase seemed like a quick way to expand. This was a good use of 1031 money that was much more labor intensive.
How did you finance this deal?
Non-recourse financing provided through Greystone.
How did you add value to the deal?
The rents had remained static for 5 years prior. We systematically raised rents building by building to hedge against vacancy. It took three months in total to bring the rents up to market (and beyond). We will now focus to cost-cutting.
What was the outcome?
We are on a 30 year fixed interest rate with a 10-year reset. We anticipate that the outcome will be years of cash flow.
Lessons learned? Challenges?
We are constantly learning but this project was a reminder that you need to be prepared to put the hard work in if you want to see results.