All Forum Posts by: John Lenhart

Sundance or balanced are who I would recommend

Mt Washington 

Investment Info:

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

Purchase price: $1,130,000
Cash invested: $245,000
Sale price: $2,100,000

38 Unit apartment building in Cincinnati, Ohio. Strong value add opportunity. An example of finding an underperforming asset and putting renovation dollars into the building to improve the units and raise rents.

In 3 years we renovated the units, raised the rents and sold to another investor for a cash out after 3 years.

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

It was a good neighborhood that was on the rebound. The building needed a lot of maintenance but the opportunity was there to really push rents given the size of the units and location. Downside was minimal because in the event I was wrong it still cash flowed.

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

Through a local broker that I had developed a good relationship with

How did you finance this deal?

Bank financing. 80/20 loan.

How did you add value to the deal?

Renovated 50% of the units. Raised rent on the renovated units by $300 per door. Non renovated units saw modest rent increases along the way as well.

What was the outcome?

We were able to get an annual return on our cash over a 3 year term of over 100%.

Lessons learned? Challenges?

Certain maintenance aspects like flat roofs were not given the consideration I should have. We tried to patch it for a couple years but it did not really help much and we eventually had to replace. Flat roofs are difficult to do piecemeal fixes.

Will zoning even allow this to happen? 

@Daniel Fridrij - even if the tenant is still employed, they may face a situation where they need to quarantine or take an unpaid leave due to a Covid issue. If they can swear on an affidavit that their inability to pay is due to Covid, and that they have taken numerous other options to try and make the rent, then the moratorium will cover them. In Ohio, if the landlord chooses not to renew the lease at the end of the term, it does not matter if they have a balance or if Covid is a factor, the landlord can just cancel the lease. 

For those on leases, each county has a local aid agency that can provide rent assistance for up to $5000 right now, I believe. Get your tenants in that process early.

From what I have been hearing, once the new administration comes in, they may be instituting more policies that are going to make eviction tougher going forward until Covid is over. 

Yes, they are still taking place, and pretty much in all counties. There are some local rules that can slow things down some depending on which county you are in, but otherwise they are still taking place.

Given the current situation, we are only doing month to month leases right now. This way, if you need to evict, you can do so a lot easier by cancelling the lease.

Right now i invest in Cincinnati (and Dayton included) and Indianapolis 

I did not mean to imply that. Certainly work through the broker but if you know the seller certainly let them know you are bidding on the property

Try and connect with the seller if you can before going under contract or forge strong broker relationships 

we have done a couple deals with multiple bidders. Neither time did we have the high bid. But what we had was a name in the local market and brokers who knew us and worked with us so that they knew we would be able to close the deal. 

Write up a sting offer but be known as someone who can close and you won’t always need to be the high bidder

I have not done a deal with him, but I have met him numerous times and feel he is a man of good character.