My First Commercial MF and Commercial Loan

[Bryce Allen]

Investment Info:

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

Purchase price: $294,500
Cash invested: $144,000

This was my first commercial MF and off market deal. My agent brought this deal to me and I jumped on it. The previous owner took exceedingly good care of the building and there was nothing that need to be done except to raise the rents. This purchase exemplifies the commit and then figure it out philosophy. I got the building under contract and then figured out financing. I was working with a local credit union who pulled out at the last minute. No problem, I had cash from a refi, a HELOC, and a personal LOC. I made the purchase and then found financing. Working with a local bank it was a breeze. Due to the market conditions I wanted to have a good amount of equity in the building so I only refi'd 50% of the purchase. While I could have gone lower I am lowering my risk tolerance because I expect a recession in late 2019 to 2020.

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

I wanted to get my feet wet in the commercial space as I look to grow my portfolio and negate risk with more units.

How did you finance this deal?

I originally used liquidity from a refi, HELOC, and a personal LOC to make the purchase and then refi'd that money out after closing.

How did you add value to the deal?

There was not much of a chance to value add to this deal. I will be raising rents after closing.

Lessons learned? Challenges?

Commit and then figure it out. Believe in yourself and stay the course.