All Forum Posts by: Terrance Doyle

Another Denver 4 unit apartment remodel completed!! 3 one bedroom and 1 two bedroom units.

• Purchased on July 20th 2019
• Completed October 28th 2019
• Rents prior to renovation - 750
• Rents post renovation - 1,295

Construction costs = 115k 

Increase to annual rental income = 26k 

Increased value of building based on new rents if sold @ 6% cap rate = 110k per apartment

Lessons learned: We had one tenant that refused to move out even after living rent free for 2 months. We offered to pay for relocation and pay their deposit, but they would not work with us. It took us 12 weeks to go through the eviction process, because we tried to handle it ourselves. We would have saved more than 10k in legal and holding costs if we would have handled the eviction process correctly from the beginning. Evictions are an ugly side of the business but very necessary. Make sure you have someone on your team that knows how to do them correctly from the start of a project.

Painting is 90% completed and landscaping is finished at our 52 unit Des Moines apartment building purchased in February 2019. 

@Chris Lopez really enjoyed recording this one, even if it took 2x to get it right LOL. Going over our process in detail actually helped me to poke holes in several steps of our under writing to fine tune it. Hope people are able to learn from mistakes we have made in the past!

@Chris Lopez had a great time recording this episode, it was fun reliving some of the ups and downs I've experienced over the years trying to figure out how to invest out of state.

I have already had numerous people hit me up on BP to talk about similar struggles they have had investing out of state, and how some of the tips we discussed related to property management are already paying off!

@Susie Lowe it is difficult to find real opportunities unless you have boots on the ground or a close relationship with a commercial broker or wholesaler. If you would like some help getting to know some good people on the ground feel free to shoot me an email and I am more than happy to get you connected with some good folks.

@Cherian Koshy thanks for making a very informative post. I like you experienced a lot of pain trying to find experienced and efficient property manager's in Des Moines, so we ended up starting our own full service PM to handle our portfolio needs. We are not currently offering PM services to other land lords in the market, but I think that the market is ripe to disrupt this space as there are very few seasoned operators that are set up for out of state investor's to actually hit pro forma rents and expenses. Good work setting up your own service tailor made to fit your specific needs.

Investment Info:

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

Purchase price: $490,000

Cash invested: $222,055

Sale price: $850,000

Here's our newly renovated 4 plex in the Westminster area of Denver. All four units are 2BR/1.5BA, 975 square feet and fully leased at 1,550 in rents plus 100 in RUBS for a total of 1,650 in gross income per unit. It is going to be sold to someone in our network at $850,000. 

To see our financials and how we were able to achieve a 70% annualized return on our capital, click here - https://drive.google.com/open?id=1q5uTGrHy7Ng2pP4OXqNF_KYboAvWqxT0

Investment Info:

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

Purchase price: $2,450,000
Cash invested: $425,000

• 21 unit apartment building
• Complete cosmetic remodel
• Scope: Converted a maintenance room to a one bedroom unit bringing the total units in the building to 22. Rents at purchase were $800 for studios, $950 for one bedrooms and $1,000 for two bedrooms. After remodel, rents were raised to $1,050, $1,150 and $1,295 respectively.
• Projected Net Profit: a $500-600K

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

Interesting detail: The property was previously under contract at over $2,600,000. The seller was in a 1031 exchange with another property in which he was already non-refundable on his earnest money. He had fallen out of contract with a previous buyer, so he had to close on or before May 31. We were able to accommodate his closing date request and negotiate a price for the property that made sense for our business plan.

Investment Info:

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

Purchase price: $2,425,000
Cash invested: $288,000

• 16 unit apartment building purchased from a distressed seller in May 2018 for $2,425,000
• Renovation cost: $288,000 in cosmetic updates to each unit, roof, carport and exterior appeal
• Scope: Added 2 additional two-bedroom apartments, and fully renovated each unit, increasing rents by 60% over an 8 month period
• Projected Net Profit: $600,000

@Bill S. Thanks for the message. I know several or most of the guys with the national companies with offices in Denver, I was hoping to meet someone starting out with a smaller boutique firm, or someone that is in residential but looking to get into more commercial. I appreciate the heads up regarding the limited number of commercial folks on the platform.