Updated over 6 years ago on . Most recent reply
First Investment Closed!
Investment Info:
Large multi-family (5+ units) buy & hold investment in Central Falls.
Purchase price: $560,000
Cash invested: $56,000
2 adjacent lots, a total of 8 residential units with 10 garage units - fully rented upon acquisition with several long standing MTM tenants (one as long as 19 years). C+ class property that was under-managed leaving ample opportunity to add value both in aesthetic improvements and in terms of tenant & lease management. Both residential structures are in relatively good shape with no urgent, major rehab required.
What made you interested in investing in this type of deal?
- Very unique in that we have 10 garage units rented along with the 8 residential units. Made for a complicated insurance and appraisal situation but a great feature to boost the bottom line.
How did you finance this deal?
- We were able to secure this package deal with a first position commercial loan at a +2% benchmark interest rate for 75% LTV. Very competitive from what I found in researching local banks.
- Layered a second position seller financing note for 15% LTV at a 5% interest rate and interest only due year one, co-termed at ten years.
- Resulting in just 10% initial cash outlay.
How did you add value to the deal?
- Gradually bring rents to market rates, some haven't increased in 5+ years.
- Add onsite laundry, building basement storage, reinforcement of rules, and outdoor facade improvement
What was the outcome?
We'll hold onto this one for quite some time.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes. Webster Bank was a pleasure to work with for bank financing.