I don't know if you're aware, but I love multifamily properties. A lot! So it's time to pick up a few more!
The past ten days have seen two new deals go under contract - one for another pair of duplexes, and another for a ten-unit apartment complex. Both properties are just north of Fayetteville, NC and will be purchased with partners. Check out a little more about each deal!
Accidentally Under Contract - 4 Units From a Wholesaler!
While I was in the midst of trying to close two other deals, one of the wholesalers I was working with had another pair of duplexes hit the market. These were in Spring Lake, NC and were very similar to the duplexes I just closed on in Hope Mills, NC.
The duplexes, listed for $105,000, were next to each other on separate parcels, all units were occupied for below market rent, the units looked to be in relatively good condition, and looked to be a pretty good deal. Due to the rush of everything going on I inquired about the property, but didn't go anywhere with it.
Fast forward a couple of weeks and the wholesaler reached back out asking if I was interested. I did a quick analysis, saw that I'd need to pick them up for $40-45k each, and after a little discussion about $80k being too low I put in a verbal/email offer at $90k. The seller had just dropped the price and to be honest, I didn't expect him to accept and I kind of forgot about it.
I took a phone call while incredibly distracted with my day job, and I was caught completely off guard when the wholesaler was on the other line telling me the seller accepted my offer! I sounded like a blubbering idiot on the phone as I tried to take my eyes off of my spreadsheet long enough to realize what was going on, and finally got it together enough to get the contract signed.
The property manager taking over my other units in Fayetteville would be the one to manage these units, so I reached out to see what I was getting myself into. He was shocked at the deal I was getting, said that rents can be raised pretty substantially, and that they'd be happy to take over management.
Due diligence began last week and the inspection is in 48 hours! The property is currently rented for a combined $1,620 with market rents at $2,400+. Based on nearby comps the value looks to be around $140,000 combined. We'll see how it officially shakes out once we have the completed appraisal, but it's currently looking like it has the opportunity to be a full BRRRR with little money brought to the table like the last pair of duplexes!
Ultimately this property will be purchased with the line of credit from the previous property I just refinanced, and my partnership will continue to grow with this property as well!
Closing is set for 6/29, so stay tuned!
Seller Financed Apartment!
Hanging on my mirror is a sheet that contains my long term and 3-year vision (thanks 12 Week Year) that I made in the fall of 2019. Second on the list of my 3-year visions was "Own first 10+ unit apartment"
A couple of weeks ago my friend and realtor out in Fayetteville told me about a 10-unit property that was on the market that he knew had the seller was interested in providing financing on. While starting negotiations with the seller I also started talking to a couple of people who I could bring in as a partner on this as I didn't have the cash to put down.
After some back and forth with the seller and some partnership discussions, the property was locked up and under contract this past weekend!
The apartment contains 10 fully occupied units, each one containing 3 beds, 2 baths, and 1,000+ sq ft. Current rent is $650, with market rent between $750-800. The seller is carrying the note for about 90% of the purchase price with a balloon payment in 5 years (I'll provide more complete numbers after closing).
Due diligence begins immediately with the property set to close the second week of July. As a result of the seller financing, some of the closing costs typically associated with a commercial property are no longer required (i.e. environmental study & appraisal). Very excited to see this deal through!
Stay tuned to the blog and to Instagram for further updates as the deal progresses!