A brick 14-Plex in Sioux Falls

[Andrew Adam]

Investment Info:

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

Purchase price: $750,000
Cash invested: $187,500

I found this off market deal and built a relationship with the owner. I had another property that had some forced appreciation and was able to do a cash out refinance to come up with a down payment for this one.This brick apartment building is well maintained and in a nice location near downtown. The rents are all about $100 below market, but it still cash flows. This will be a value add play and a long term hold.

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

The commercial financing on apartment buildings is great. 20 year debt means when I am in my early 50's it will be paid off and cash flow like crazy. I like the equity build up each month. I love brick buildings as there is no siding to replace. Having 1 lawn, 1 boiler, 1 water heater, 1 roof is great! The building was built for the proper amount of units. Rental properties are great as they can appreciate, cash flow, pay themselves off.

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

I called a for rent by owner sign and asked if they wanted to sell. I build a relationship with them.

How did you finance this deal?

I financed the deal by cash out refinancing another deal.

How did you add value to the deal?

I will be able to improve the operations of the property and increase the income.

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

Luke Garry at American Bank & Trust is a great commercial lender.