All Forum Posts by: Augustus Bukowski

@Mark Fries I can certainly see the rendering looks that way. Renderings are simply used to show the city and buyer roughly what the building will look like. We typically don’t spend much money on renderings since they are not important for the development of this size.

Investment Info:

Single-family residence other investment in Seattle.

Purchase price: $499,950
Cash invested: $195,000
Sale price: $1,692,500

Purchase existing home, build new SFR, pack full of design and custom quality finishes.

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

Building high end luxury spec homes is very fun. We will incorporate some of the high end finishes we try on our spec homes into our multi family portfolio.

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

It was on the MLS and no one wanted it.

How did you finance this deal?

Cash, then construction loan through local regional lender.

How did you add value to the deal?

We built a new SFR

What was the outcome?

Big win!

Investment Info:

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

Purchase price: $557,000
Cash invested: $450,000

Multi family development, built 20 unit apartment on 5,000 sqft lot.

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

The property was zoned really well for multi family development.

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

The property had been sitting on the market for about a year. I negotiated the price lower, along with a year long closing so we could begin developing the lot.

How did you finance this deal?

Conventional fixed debt

How did you add value to the deal?

We built a 20 unit apartment building.

What was the outcome?

We now have a 5.85 million building that cost 3.65 million, zero dollars are still invested and we get 9,000 per month including principal pay down.

Investment Info:

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

Purchase price: $475,000
Cash invested: $250,000

33 unit apartment development project.

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

The property was a large parcel of multi family development dirt. The size and zoning were too good for the price.

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

The deal was on the MLS. It was a multiple offer situation. I represented my self to save the buyers agency commission, and kept constant communication with the listing agent.

How did you finance this deal?

The home was not financeable so we used hard money. Once we closed we applied for a HELOC with a bank that does not require an appraisal and used those funds to payoff the hard money.

How did you add value to the deal?

We are permitting the land for 33 unit apartment.

Investment Info:

Large multi-family (5+ units) fix & flip investment in Seattle.

Purchase price: $1,150,000
Cash invested: $272,000
Sale price: $1,700,000

Purchased an undervalued property, performed a light renovation, sold the property.

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

The property was undervalued and had huge upside with zoning.

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

The property was listed on commercial listing site. This was a multiple offer situation, we lost to the highest bidder. The highest bidder backed out, and seller came back to us. We negotiated the price down and the seller accepted.

How did you finance this deal?

We financed the property 20% down with Alaska Federal Credit union

How did you add value to the deal?

We completed a light renovation and repositioned the asset.

What was the outcome?

We liquidated the asset after holding for a bit over a year.

Lessons learned? Challenges?

Always stick to your offer. If someone else wins it’s not the end of the world. The only thing that matters are your numbers.

Investment Info:

Large multi-family (5+ units) other investment.

Purchase price: $225,000
Cash invested: $155,000
Sale price: $1,395,000

We took a piece of raw land through the rigorous seattle permitting process. Project was a mixed use building consisting of 32 micro housing units and 2 ground floor commercial spaces.

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

The property was zoned for multi family and no one was buying it. it was a challenging site, but the price was far too attractive to pass up. The potential gain from development was much greater than a flip or other strategy.

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

This property was on the MLS, we made several offers and kept getting beat out by developers whom would later back out of feasibility. When it came back in market we pushed the price down further.

How did you finance this deal?

We negotiated a seller carried loan for 1 year term. Then paid their loan off and held as cash.

How did you add value to the deal?

We entitled the property for a mixed use building consisting of 32 micro housing units and 2 ground floor commercial spaces. In addition we mitigated some of the more difficult utility items including relocating a power pole.

What was the outcome?

We nearly tripled our money.

Lessons learned? Challenges?

If you get a great price take on a challenge, but make sure you have enough margin to ensure success.

Final sales price was $2.5 million, total cost was approximately 1.33 million. 

Investment Info:

Large multi-family (5+ units) other investment.

Purchase price: $225,000

Cash invested: $55,000

Sale price: $1,395,000

Develop a mixed use building consisting of 32 micro housing units and 2 ground floor commercial spaces.

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

This site was small, cheap, zoned for multi family and very difficult.

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

This project had been on and off the MLS and through many rounds of feasibility and development. Due to this we were able to negotiate a great price and utilize seller carried financing.

How did you finance this deal?

Because of the project complexity and lack of buyers, we were able to negotiated seller carried financing of 180 K for 12 months from our closing date.

How did you add value to the deal?

We permitted the site for a mixed use project consisting of 32 micro housing units and 2 ground floor commercial units.

What was the outcome?

Upon obtaining permits we re-evaluated our position and the rental market. We decided to take slightly lower return by selling the property as a fully permitted project, and mitigate the construction and market risk.

Lessons learned? Challenges?

Never settle, always re-evaluate strategy, choose the option with best risk reward outcome, don't just base your decision on total dollars. You must take into account the amount of money you can make today and value that versus any additional gains over the additional timeline required to complete your original objective.

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

Investment Info:

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

Purchase price: $145,800

Cash invested: $25,000

Sale price: $2,500,000

Buy, Build, Rent, Refinance, Repeat!

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

This project was on the MLS way too long as a short sale. I tried several times to purchase it, but kept getting outbid. Then the deal would fall through, and I would bid again. Each time getting outbid, and having the deal fall through. Finally when it fell through again, the agent called me and just gave it to me directly...... It was LR3 dirt for under 150 K come on Seattle, why would you not close it.

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

This project was on the MLS, it was a short sale. I followed up on the deal while it was under contract multiple times and let the agent know that I wanted it, and if it fell through I would close. Since it was a short sale, I told them I wanted it at the bank approved price and would close in 21 days from short sale approval with no contingencies.

How did you finance this deal?

Conventional investment property loan with 15% down payment through Fannie Mae. 6 months after the purchase, I did a cash out refinance and had negative 30 K invested in the transaction! I love financing!!!!!

How did you add value to the deal?

We built an 8 unit apartment project on the site.

What was the outcome?

We generated the highest $/sqft rents in the area, kept the property for about 1.5 years, and started to notice the rental market was a little more difficult. We decided to liquidate the project since our rents appeared to be at the height of what they could potentially be. We hit the market perfect and were able to liquidate before cap rates started to rise a bit.

Lessons learned? Challenges?

always re-evaluate your investment objectives. If your plan is to hold the property forever that is great, but maybe the correct move is to sell the property and roll those gains into a property that would generate more revenue and growth potential. Once you maximize your return on a project it is usually time to liquidate and put that capital to better use somewhere else.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $525,000

Cash invested: $1

Sale price: $1,690,000

Make a Million dollars with ZERO invested! Convert existing tri-plex into a 4-plex, renovate the entire structure, raise rents, hold and sell.

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

The property was located up the street from Children's hospital smack dab in the middle of some of the most expensive homes in Seattle, and a short walk to the University of Washington. The units were large consisting of 2 X 950 SQFT 2 bed 1 bath units and a 1 X 2700 SQFT 5 bed 2.5 bath unit. I realized I could easily convert the large unit into a 3 bed 1.5 bath unit and 3 bed 1 bath unit, and renovate the building to increase rent.

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

An attorney reached out and asked if I could value a property. A real estate investor was trying to purchase it, and was making it over complicated. I asked the attorney what the seller wanted, they wanted a simple 30 day close with no contingencies and 25 K more than the other investor. I had no money at all, but told the attorney to write it up at 525 K with 30 day close and no contingencies and I would sign within the hour. I moved quick, aggressive, and pushed for mutual.

How did you finance this deal?

I took a 125 K hard money loan out secured against our North Northgate construction site with a promise to cross-collateralize the note down the road against the tri-plex itself. I used the 125 K secured hard money loan as down payment on a conventional Fannie Mae loan to purchase the property. Once I closed, I got a Home Equity line of credit against the equity of the Tri-plex to remodel the existing units, refinanced and paid off hard money and HELOC, then got another HELOC to add 4th unit

How did you add value to the deal?

I renovated the property increasing the rents, and added a unit to the existing property.

What was the outcome?

We held the property as a cash flowing asset generating roughly 4000 per month cash flow, and building about 1100 per month in principal pay down. When we felt the market cap rates were at their low, we liquidated the asset resulting in a nearly 1 million of long term capital gains.

Lessons learned? Challenges?

Never make a deal complicated. Determine what a seller is looking for, be open with them. Tell them exactly what you are willing to do, and work with them to execute on your closing.

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