My 2nd ever 68 Unit MF just closed! 0 to 112 Units in 1 year!!!

My 2nd ever 68 Unit MF just closed! 0 to 112 Units in 1 year!!!

New to Real Estate · New York, NY · Member since 2019 · 234 posts · 264 votes

Yosef Your Brosef’s Night and Weekend Multifamily Journey #2: 68 Unit apartment just closed last Friday following 44 Unit closing 3 months ago. Currently have a total of 112 Unit as GP since beginning my journey about 1 year ago.

Me: Full-time W2 lawyer with 9-6 job (well...officially anyway) with two young, demanding girls.

To get to know my background, please read about my first deal, 44 Unit closed 3 months ago: https://www.biggerpockets.com/forums/223-biggerpockets-success-stories/topics/921192-my-first-ever-44-unit-mf-apartment-closed-in-dec-2020?page=1#p5370534

68 Unit Property Background:

1999 Built B class 68 Unit Apartment in Wichita KS.

We got this lead about 8 months ago from a consultant and underwrote it. We liked it and started working on it.

Little did any of us expect the process to to go this long!!! I had some sleepless nights due to this one!! Stay tuned to the end of the story for several twists!

Initial deal structure: Syndication with one LP class, Fannie Mae Loan Assumption, Supplemental Loan, Two LLCs - Manager LLC & Fund LLC (GP class & LP class)

Some of the milestones:

August 2020 - 68 unit LOI accepted and PSA negotiation started.

September 16, 2020 - 68 Unit under Contract / Due Diligence (Financial and Physical) started.

October 2020 - Reviewed PPM and OAs untill 4 am making comments / First Deal Presentation to Potential LPs / This was also when we got the first 44 Unit deal under contract.

November 2020 - Multiple calls/emails among 4 attorneys (Lender attorney, Buyer's Closing Attorney, Buyer's SEC Attorney and Myself) which ended with restructuring the deal creating another entity (Holding LLC), revision to OAs and PPM. So now total three LLCs / Due to the change of entity structure, need more time to close ending with extension of Financing Period of 45 days with $10K extra EMD deposit / 2nd Deal presentation.

December 2020 - Prepared to close but the property's physical occupancy rate started going down and lender started being concerned about it. At the time of contract, it was approx 95%, but it went down to 90%, affecting the amount of supplemental loan. Seller agreed to extend the financing period further with no further EMD until 3/15/21.

January & February 2021 - Spent time trying to have our PM coordinate with seller’s PM to recover the occupancy back to 95% + / In the meantime, communicated to the seller to extend the closing another month but was refused, and ended up getting 2 week extension until the end of March / We got the occupancy back to where we were / Towards the end of Feb, we had another major deal structural change by creating another class of share with much higher return but with 6-figure minimum to attract more investors / We decided not to pursue the supplemental together with the loan assumption / PPM and OA amended, reviewed and implemented.

March 12, 2020 - On the day of closing:

We weren’t sure if this closing was really happening because everything moved really fast and the lender’s attorney said if he wouldn’t get certain things by morning, we may not close this and may need to push it to the following week.

Joe drove an hour to our local bank to initiate the wire to the escrow on time. I was constantly talking to the attorneys making sure things were moving, and Hendra and Mercy were collecting the updated PPM and OA and sending them out, etc. while patiently waiting and wishing for the closing to happen…

AND IT HAPPENED!!!!

After 238 days, we pushed through as a team and never gave up to make it happen!

Throughout the whole process, I learned a ton and valuable lessons:

I gained a deeper understanding of how syndication works: the structure and the model. But this one was more than just a syndication. We had to go through the loan assumption process and learned a ton. We also learned how supplemental loan played a role in this. I witnessed how capital raising works and how to present a deal to investors. Another twist we had to go through was we had to change our deal structure at the last minute per my mentor’s recommendation and it totally worked!! We created another class of share! People loved it!

I also learned how to deal with the seller’s attorney, lender’s attorney, SEC attorney and our closing attorney. Including myself, 5 attorneys exchanged about 90 emails for the last couple of days prior to the closing.

Cheers to all who helped us along the way and congrats to my partners as we grew stronger throughout this process!

Special thanks to Greg & Kim who guided us through the whole process and will help us with asset management. And to Darren and Ray who helped us raise capital and did a superb job. And to Chris Jackson and Marco for deal analysis and all their guidance and advice.

I thank you all and let’s go for the next deal!!

Yosef

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New to Real Estate · Dayton, OH · Member since 2021 · 2 posts · 3 votes
5y

Congratulations on your second deal! Over 100+ deals in one year! That’s incredible!! It is so inspiring to see you gain so much momentum in the past few months! 🙌🏻

The fact you saw this deal to the end despite all of the surprises speaks to your resilience and determination.

So glad to be in your network. You are truly one of the hardest working people I know.

Will be watching you get your next deal.

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  • New to Real Estate · Dayton, OH · Member since 2021 · 2 posts · 3 votes
    5y

    Congratulations on your second deal! Over 100+ deals in one year! That’s incredible!! It is so inspiring to see you gain so much momentum in the past few months! 🙌🏻

    The fact you saw this deal to the end despite all of the surprises speaks to your resilience and determination.

    So glad to be in your network. You are truly one of the hardest working people I know.

    Will be watching you get your next deal.

  • Columbia, MD · Member since 2015 · 7 posts · 2 votes
    5y

    Congratulation Yosef on the 68 unit. I can't wait to see what the rest of 2021 holds for you. Well deserved 💥💪🏽💥

  • Yonah WeissPro Member
    Cost Segregation Expert and Investor · Lakewood, NJ · Member since 2017 · 1k+ posts · 1k+ votes
    5y

    @Yosef Lee You are crushing it! I love the fact that this is only just the beginning! 

    I'll be able to say I knew you before you were a real estate mogul! 💪👊

  • Chad RockeBusiness Member
    Real Estate Agent · Denver, CO · Member since 2021 · 383 posts · 181 votes
    5y

    @Yosef Lee - wow! That is amazing, you are killing it! Nice work and keep it going. 

  • New to Real Estate · Los Angeles · Member since 2019 · 24 posts · 8 votes
    5y

    Yosef, 

    With all the obstacles being thrown at you and your team, you rolled up your sleeves and persevered. Your team came together and found solutions.  I am new to this game and seeing stories like this, show me that anything can be done.  If you did this in one year, I can't wait to see what you can do in ten!  Keep up the amazing work. 

  • Investor · Charleston, SC · Member since 2021 · 120 posts · 108 votes
    5y

    @Yosef Lee

    Congratulations on the deal! I am interested in the occupancy rates being lower at closing...did the seller's PM team stop trying to keep the property leased up once they found out it was under contract? Or was the occupancy misrepresented?  Either way good job for figuring out a solution to get the deal done.  I would love to connect and hear more about this deal.

  • New to Real Estate · New York, NY · Member since 2019 · 234 posts · 264 votes
    5y
    Originally posted by @Theresa Vu:

    Congratulations on your second deal! Over 100+ deals in one year! That’s incredible!! It is so inspiring to see you gain so much momentum in the past few months! 🙌🏻

    The fact you saw this deal to the end despite all of the surprises speaks to your resilience and determination.

    So glad to be in your network. You are truly one of the hardest working people I know.

    Will be watching you get your next deal.

    Thank you Theresa for the encouragement!!! I really appreciate that!! Yosef 

  • New to Real Estate · New York, NY · Member since 2019 · 234 posts · 264 votes
    5y
    Originally posted by @Billye Sanford:

    Congratulation Yosef on the 68 unit. I can't wait to see what the rest of 2021 holds for you. Well deserved 💥💪🏽💥 

    Hey Billye! Good to see you here! Thank you and let's crush 2021!!! 

  • New to Real Estate · New York, NY · Member since 2019 · 234 posts · 264 votes
    5y
    Originally posted by @Yonah Weiss:

    @Yosef Lee You are crushing it! I love the fact that this is only just the beginning! 

    I'll be able to say I knew you before you were a real estate mogul! 💪👊

    Thank you Yonah!!! lol Feeling great to hear such a compliment from a player like you!!! Let's crush 2021!!! Yosef 

  • New to Real Estate · New York, NY · Member since 2019 · 234 posts · 264 votes
    5y
    Originally posted by @Chad Rocke:

    @Yosef Lee - wow! That is amazing, you are killing it! Nice work and keep it going. 

    Thank you Chad!! I really appreciate that! Yosef 

  • New to Real Estate · New York, NY · Member since 2019 · 234 posts · 264 votes
    5y
    Originally posted by @Steven Zamorano:

    Yosef, 

    With all the obstacles being thrown at you and your team, you rolled up your sleeves and persevered. Your team came together and found solutions.  I am new to this game and seeing stories like this, show me that anything can be done.  If you did this in one year, I can't wait to see what you can do in ten!  Keep up the amazing work. 

    Thank you Steven! All possible due to a great team and partners! I'm very excited for the years to come!! If you are starting this game let's connect and I can share what I learned!!! FB: yosefhlee.esq   LinkedIn: yosefyourbrosef 

  • New to Real Estate · New York, NY · Member since 2019 · 234 posts · 264 votes
    5y
    Originally posted by @Jackson Babcock:

    @Yosef Lee

    Congratulations on the deal! I am interested in the occupancy rates being lower at closing...did the seller's PM team stop trying to keep the property leased up once they found out it was under contract? Or was the occupancy misrepresented?  Either way good job for figuring out a solution to get the deal done.  I would love to connect and hear more about this deal.

    Hey Jackson! Thank you and let's connect and get on a zoom call! I'll tell you what happened! FB: yosefhlee.esq   LinkedIn: yosefyourbrosef  

  • Multifamily Syndicator · Houston, TX · Member since 2018 · 188 posts · 192 votes
    5y

    Impressive, my friend! Congrats again!

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