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Excited to announce that I’ve gone under contract for a ~22 unit property in DFW! 1/x
The story: The dad purchased the property and mismanaged. He was trading work for rent and we are now dealing with family heirs now for the purchase. 2/x
Sellers used a residential agent to come to market at ~$87,500 a door, which was way over-priced.
During walkthroughs, seller said they hadn’t had much traffic, and were dropping price to $82.5k per door. We offered $70k/d with a 70% senior and 15% sellers note at 3%. 3/x
During walkthroughs, seller said they hadn’t had much traffic, and were dropping price to $82.5k per door. We offered $70k/d with a 70% senior and 15% sellers note at 3%. 3/x
Counter was $75k/d and a sellers note @ 8%. We passed and stayed quiet for a while. It came back to us that they’d be open to a $70k/d all cash deal. We settled at $68k/d (22% discount to original list price) 4/x
The existing records are terrible, and there’s no sophistication in the operations. There’s not even a records of the sq ft of each unit.
It’s a class C property. Sellers put $200k into deferred maintenance, but the bulk of the value add still remains. 5/x
It’s a class C property. Sellers put $200k into deferred maintenance, but the bulk of the value add still remains. 5/x
We’ve had two verbal BOV’s from local brokers ranging from $1.5mm to $1.575 which helps affirm the value we thought we were getting. 6/x
For our debt; we are using a regional bank with a bridge note. Its full recourse, but ~4.15% at 70% LTV with 12 months of I/O and we will refi into permanent agency debt in year 2. 7/x
The property is relatively close to my house, so I will employ the existing guy that lives on site, and self-manage the property. 8/x
Thanks to @austinpatsine for flagging this property down and being great through this process as buyer’s rep. Hopefully this is the first of many more! 9/x
