All Forum Posts by: Stephen Predmore

Investment Info:

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

Purchase price: $3,080,000

Property Overview
• 30 units (5 buildings)
• 96% occupancy
• Below market rents by $200+
• Mom & pop property owners
• Ample parking
• Other income through covered parking and storage
• Major CapEx already done
• Prime location across the bridge from JBER (Air Force & Army joint base)

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

Looking to scale up from single family rentals.

Alaska – Why We Love It
• Top quintile for GDP growth in 2022; 4th largest cargo airport worldwide
• Anchorage ranked #23 best city to live in USA in 2022
• Alaska's economy is driven by a range of industries, including oil and gas,
healthcare, fishing, and govt
• Largest US commercial fishing industry; larger than top 10 combined
• 25,000 active troops stationed in 9 military bases
• 20% of the land mass of the Lower 48; 2x larger than TX

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

Networking with other multifamily operators. Facebook groups, mastermind groups.

How did you finance this deal?

Joint Venture deal structured with over 20 investors. FNMA debt 2.6M.

How did you add value to the deal?

The Opportunity
• Current owners are tired of running the property and want to redeploy capital elsewhere
• Complete remainder of deferred maintenance in common areas
• Implement better tenant management through professional property management, ancillary fees, and operational excellence
• Burn off loss-to-lease through re-leasing at market rates

What is the projected outcome?

15.4% Internal Rate of Return
9.1% Cash on Cash
2.16x Equity Multiple
5-7 year hold

Lessons learned? Challenges?

TBD :)

@Elliot Mitchell  Check out the 'Maryland Investors Network' Facebook group for lots of recommendations.

Alyssa Yumi Nelson  I see 14 properties in that general area in 150-200k range.  6 of them are south of Orleans St.   I like this area as well.  Let me know if you'd like to chat  :)

@Kenneth Cheston Interested!

@Martez Scott Welcome Martez. Checkout the 'Maryland Investors Network' Facebook group and their monthly meetup in Millersville.

@Martez Scott Welcome Martez. Checkout the 'Maryland Investors Network' Facebook group and their monthly meetup in Millersville.

@Martez Scott Welcome Martez. Checkout the 'Maryland Investors Network' Facebook group and their monthly meetup in Millersville.

@Martez Scott Welcome Martez. Checkout the 'Maryland Investors Network' Facebook group and their monthly meetup in Millersville.

Great job! What area is located? Were you able to refi with the higher ARV? What are you hoping to get for rents?

@Seth Hochberg Thank you.  It's hard to carve out exactly how much the 1/2 bath added to the cost.  My GC had stuff broken down into electric, plumbing and drywall work for the entire house.  I would estimate about 3-4k though.  It's pretty basic: sink, toilet, fan, light, framing, drywall.  All of the plumbing was being ripped out and re-routed through the basement ceiling so it was easy to poke new holes for 1/2 bath on the main floor.  We just used a corner of the large dining room for the 1/2 bath.   If adding the 1/2 bath was the only plumbing/electric/drywall activity, or if it was more difficult to run the utilities, the cost would certainly be greater.

I toyed with adding a 1/2 bath in the basement as well as finishing the basement.  But since the ceiling heights are less than 7 feet, it could never be counted as a 4th bedroom for Section 8.