Commercial Property Advisors

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Real Deals


Learn valuable insights from the following detailed case studies of real deals completed in today’s market by our students in today’s market.

Case Studies

 

$0 Down 18-Unit Apartment Investment Deal

Deal Summary

  • Property: 18 Unit Multi Family Apartments
  • Purchase Price: $947,894
  • Financing: $758,316 Local Bank Loan (3.75% 25 yr Am)
  • Down Payment: $171,021.17 Syndicated (Private money partner owns 60%; Protege owns 40% with no money down)
  • Value Add Plan: Update units as they are vacated; raise rents
  • Value Add Funding: Use existing cash flow ($3,500/mo) and $11,000 seller credit at closing
  • Pro Forma: $1,400,000 Value (at 7% market cap), 11% Deal Cap Rate, $8,200/mo Cash Flow, 29% Cash On Cash Return

 

15% Cap Mixed Use

Deal Summary

  • Property: Mixed Use; 5 Retail Units, 7 Apartment Units & 2 Story Vacant Building
  • Purchase Price: $1,140,000
  • Financing: $1,509,100 12% Hard Money Loan; interest only payments and 18 month balloon
  • Down Payment: $285,000 ($230,000 from the Protege’s savings and $55,000 from private money partner)
  • Value Add Plan: Update the vacant building into 1st Floor Retail and 4 Apartment Units on the 2nd Floor.
  • Value Add Funding: Hard Money Purchase Loan included $654,100 to pay for the updating of the vacant building.
  • Pro Forma: $2,300,000 Value; 15% Deal Cap Rate; $8,500/mo Cash Flow; 100% Cash on Cash Return upon Cash Out Refinance

 

Motel to Apartment Conversion

Deal Summary

  • Property: 19 Unit Motel; 6 Unit Mult Family Apartments and extra parcel of land
  • Purchase Price: $1,600,000
  • Financing: $1,440,000 Seller Financing (2%; 25 yrs amortization; 5 year balloon)
  • Down Payment: $160,000 (Protege sold his single family home rental and did a 1031 exchange)
  • Value Add Plan: Convert motel units into apartment units and sell off extra parcel of land
  • Value Add Funding: Money from the sale of the extra parcel of land funds the updates needed to legally convert motel rooms into apartment units.
  • Pro Forma: $2,000,000 Value; 14% Deal Cap Rate; $5,860/mo Cash Flow; 17% Cash on Cash Return

 

HUGE Value Add Mobile Home Park

Deal Summary

  • Property: 8 Unit Mobile Home Park (with room to add 6 more pads)
  • Purchase Price: $240,000
  • Financing: $233,750, 12% Hard Money Loan (interest only payments; 1 year balloon)
  • Down Payment: $56,250 (from Protege’s savings) + $15,000 Seller Credit at Closing
  • Value Add Plan: Repair/replace existing 8 mobile homes and add 6 more mobile homes
  • Value Add Funding: Protege’s savings to fund the renovations of the existing mobile homes and then use manufacturers financing to purchase the 6 new mobile homes.
  • Pro Forma: $1,400,000 Value; 62% Deal Cap Rate; $7,716/mo Cash Flow; 164.60% Cash on Cash Return

 

“Ugly” RV & Boat Storage Facility

Deal Summary

  • Property: 348 RV/Boat Storage Units & 14 Self Storage Units
  • Purchase Price: $5,500,000
  • Financing: $4,950,000 Seller Financing (5% interest only payments with 5 year balloon)
  • Down Payment: $550,000 (from Protege’s savings)
  • Phase 1 Value Add Plan: Improve management with better software and increase rents to market rates
  • Phase 1 Value Add Funding: None needed; the existing cash flow can pay for the new software.
  • Phase 1 Pro Forma: $375,000 NOI; $7.5MM value at 5% market cap rate; 8.3% Deal Cap Rate
  • Phase 2 Value Add Plan: Upgrade with asphalt and canopies
  • Phase 2 Pro Forma: $600,000 NOI; $12MM value at 5% market cap rate
  • Phase 3 Value Add Plan: Change Zoning; Add 2.5 acres of Self Storage
  • Phase 3 Pro Forma: $1.2MM NOI; $37MM property value at a 5% market cap rate

 

Self Storage Portfolio

Deal Summary: Dean’s 1st Self Storage Property

  • Property: 52 Self Storage Unit Facility (9,100 sq ft)
  • Purchase Price: $274,000
  • Financing: $246,600 Seller Financing (5% interest only payments; 3 year balloon)
  • Down Payment: $27,400 (from Protege’s savings)
  • Value Add Plan: Minor updates to the units, improve the marketing, update management with new software.
  • Value Add Funding: $19,000 in renovations funded by the Protege
  • Pro Forma: $500,000 Value; 22% Deal Cap Rate; $4,500/mo Cash Flow; 38% Cash on Cash Return

 

Deal Summary: Dean’s 2nd Self Storage Property

  • Property: 115 Self Storage Unit Facility (15,000 sq ft)
  • Purchase Price: $885,000
  • Financing: $663,750 Commercial Bank Loan (4% 25 Year Am)
  • Down Payment: $221,250 (from Protege’s cash out refinance of a previous deal)
  • Value Add Plan: Add 19 new climate control units
  • Value Add Funding: Use the current $7,000/mo cash flow to fund the addition of new units overtime
  • Pro Forma: 13% Deal Cap Rate; $480,000 forced appreciation; $2,833/mo cash flow


Deal Summary: Dean’s 3rd Self Storage Property

  • Property: 115 Self Storage Units and Warehouse (119,000 sq ft)
  • Purchase Price: $2,200,000
  • Financing: $1,980,000 Seller Financed (5% interest only payments; 3 year balloon)
  • Down Payment: $220,000 (from Protege’s savings)
  • Value Add Plan: Make $200,000 in renovations, improve pricing
  • Value Add Funding: Use existing cash flow to fund renovations
  • Pro Forma: $5,000,000 Value; 10% Deal Cap Rate; $39,000/mo gross income

 

18 Unit Apartment with $2MM Value Add

Deal Summary

  • Property: 18 Unit Multi Family Apartments + Single Family Cottage
  • Purchase Price: $1,730,000
  • Financing: $1,120,000 Commercial Bank Loan (4.5% interest only payment for 3 years)
  • Down Payment: $638,344.58 (Protege sold single family rentals and offset capital gains by accelerating depreciation with a cost segregation study)
  • Value Add Plan: Increase rents by $200/mo for the 1 bedroom units and $300/mo for the 2 bedroom units
  • Value Add Funding: Seller agreed to $100,000 in repairs prior to closing
  • Pro Forma: $4,000,000 Value; 10% Deal Cap Rate; $8,328/mo Cash Flow; 17% Cash on Cash Return

 

90 Unit Multi Family Apartment (100% Cash on Cash Return; $19,000/mo Cash Flow)

Deal Summary

  • Property: 90 Unit Multi Family (Distressed; 30+ vacant units; much needed repairs; poorly mis-managed)
  • Purchase Price: $3,060,000
  • Financing: $1,860,000 Local Hard Money Lender 1st Mortgage, $1,200,000 Seller Held 2nd Mortgage (4% interest; no payments for 6 months)
  • Down Payment: $346,085 (from the Protege’s retirement savings)
  • Value Add: Renovated 30+ vacant units and leased at higher rents; renovated previously occupied units as they became vacant and then leased at higher rents
  • Value Add Funding: From property cash flow
  • Pro Forma: $6,000,000 Value; 14% Deal Cap Rate; $19,000/mo Cash Flow; 100% Cash on Cash Return upon Cash Out Refinance which occurred 2 years after purchase ($3,900,000 Fannie Mae 30 year amortization, 10 year fixed 4.75% interest rate loan)

 

RV Storage Facility

Deal Summary

  • Property: 185 Unit RV & Boat Storage
  • Purchase Price: $2,375,000
  • Financing: $1,956,000 SBA Loan (6.25% 25 Year Am)
  • Down Payment: $471,500 (from Protege cash out refinance of 90 Unit apartment deal
  • Value Add Plan: Add 117 Units
  • Value Add Funding: Additional $2,440,000 construction loan
  • Pro Forma: $9,400,000 value at 7% market cap

 

$290,000 Instant Equity 26 Unit Apartment Deal

Deal Summary

  • Property: 26 Unit Multi Family Apartments
  • Purchase Price: $520,000 (appraised for $750,000 at the time of purchase)
  • Financing: $390,000 bank loan (4.29% interest with 30 yrs amortization)
  • Down Payment: $130,000
  • Value Add Plan: Update units as they are vacated and then raise rents $150/mo/unit
  • Value Add Funding: $66,000 credit at closing
  • Pro Forma: $970,000 Value (at 7% market cap); 17% Deal Cap Rate; $5,400 Cash Flow; 50% Cash on Cash Return

 

16 Unit Apartment Deal

Deal Summary

  • Property: 16 Unit Multi Family Apartments
  • Purchase Price: $900,000
  • Financing: $765,000 Commercial Bank Loan (4.5% interest rate 7 years fixed 20 year amortization)
  • Down Payment: $135,000 Syndicated (7 investors own 65%; Protege owns 35% no money down)
  • Value Add Plan: Update each unit as it became vacant, renovated and then raised rents
  • Value Add Funding: Raised additional $65,000 beyond the down payment to fund the value adds
  • Pro Forma: 12% Deal Cap Rate; $4,017/mo Cash Flow; 36% Cash on Cash Return

 

$0 Down 90-Unit Apartment Deal

Deal Summary

  • Property: 90 Unit Multi Family Apartments
  • Purchase Price: $3,600,000
  • Financing: $1,600,000 Commercial Loan; $2,100,000 Seller Held 2nd Mortgage (5% interest only; 2 year balloon)
  • Down Payment: $0 (Commercial Loan was obtained and guaranteed by Jacob’s two partners who had tremendous experience as multi family property managers; Jacob is 33% owner and put in no money and had no prior experience)
  • Value Add Plan: Repair units as they are vacated and increase rents by $300/unit
  • Value Add Funding: Seller returned $100,000 from the proceeds at closing and the cash flow are covering the renovation costs per unit.
  • Pro Forma: $7,000,000 Value; 20% Deal Cap Rate; $10,000/mo cash flow; Infinite Cash on Cash Return (since no money down)

 

Retirement Income from 8 Unit Apartment Deal

Deal Summary

  • Property: 8 Unit Multi Family Apartments
  • Purchase Price: $383,000
  • Financing: $268,100 Commercial Bank Loan (4.5% fixed 25 year amortization)
  • Down Payment: $114,900 (from Protege savings)
  • Value Add Plan: Update 6 of the 8 units; increasing the rents from $500/mo to $1,150/mo
  • Value Add Funding: $114,000 in renovations funded by the same bank that originated the purchase loan
  • Pro Forma: $665,000 Value; 9% Deal Cap Rate; $3,800/mo Cash Flow; 40% Cash on Cash Return

 

Quick $20,000 Commercial Wholesale

Deal Summary

  • Properties: 14 Unit Multi Family Apartments
  • Purchase Price: $747,500
  • Financing: Assigned the contract for $20,000

 

97% ROI 24-Unit Apartment Deal

Deal Summary

  • Property: 24 Unit Multi Family Apartments
  • Purchase Price: $925,000
  • Financing: $779,477 Seller Financing
  • Down Payment: $144,500 Partially Syndicated ($53,333 Private Money; Protege put in $91,167 from savings)
  • Value Add Plan: Update units as they vacated, raised rents to market rate
  • Value Add Funding: Existing Cash Flow
  • Pro Forma: Cash out refinance a year after purchase pulled out $190,000 above and beyond paying back down payment

 

13% Cap, 33% Cash on Cash 5 Unit Multifamily

Deal Summary

  • Property: 5 Unit Multi Family Apartment
  • Purchase Price: $260,000
  • Financing: $182,000 Local Bank Loan
  • Down payment: $60,000
  • Value Add Plan: Increase rents to market rates
  • Value Add Funding: Seller credited back $5,000 at closing; otherwise nothing needed
  • Pro Forma: $380,000 Value; 13% Deal Cap Rate; $1,605/mo Cash Flow; 34% Cash on Cash Return

 

Creative Financing Acquisition of 12 Unit

Deal Summary

  • Property: 12 Unit Multi Family Apartments
  • Purchase Price: $325,000
  • Financing: $275,000 Seller Financing at 7% interest on a 30 year amortization with a balloon note in 2 years
  • Down Payment: $50,000 (from Protege’s savings)
  • Value Add Plan: Update each unit when vacated; increase rents
  • Value Add Funding: Existing cash flow

 

$60,000 Multi-Family Flip

Deal Summary

  • Property: 5 Unit Multi Family Apartment
  • Purchase Price: $400,000
  • Financing: Assigned to new Buyer for $60,000

 

Why Cali Engineer Got 24 Unit in Kentucky

Deal Summary

  • Property: 24 Unit Multifamily Apartments
  • Purchase Price: $1,215,750
  • Financing: $972,600 Local Bank Loan
  • Down Payment: $193,150 (from Protege’s savings) + $50,000 Seller Credit
  • Value Add Plan: Remove from Section 8 / LORA program; update units as they are vacated, raise rents to market rate
  • Value Add Funding: Protege Savings and Existing Cash Flow
  • Pro Forma: $1 Million value increase in 12-24 months

 

Government Funding for 18 Unit Multifamily

Deal Summary

  • Property: 18 Unit Multifamily Apartments
  • Purchase Price: $1,150,000
  • Financing: $862,500 Local Bank Loan
  • Down Payment: $287,000 ($254,000 syndicated; $33,000 from Protege savings)
  • Value Add Plan: Update units as they are vacated, raise rents to market rate
  • Value Add Funding: $57,350 0% interest local government rehab loan
  • Pro Forma: $1.5 Million value increase in 12 months

 

How to Build a Multifamily Portfolio from Scratch

Deals

  • Properties: 7 multifamily properties totaling 45 Units
  • Cash Flow: $600,000/year!

 

$750,000 Profit from 12 Units

Property 1 Deal Summary

  • Property: 6 Unit Multi Family Apartments
  • Purchase Price: $300,000
  • Financing: $299,000 Seller Financing (5%, 20 yrs amortization, 1 year balloon)
  • Down Payment: $1,000 ($10,000 seller credit at closing and the remaining $1,000 from Protege savings)
  • Value Add Plan: Unit 5 heavy turnover, water damage, build new wall. $7715 cost. Rent was $700. New rent will be $1200. Will convert from 2b to 3bed with a new wall. Needs a new roof at $15K coming in a few months.
  • Value Add Funding: Protege savings and property cash flow
  • Pro Forma Financials: Deal Cap Rate was 18%, Cash Flow was $2,600/mo even after a cash out refinance; Sold for $675,000 ($375,000 profit)

Property 2 Deal Summary

  • Property: 6 Unit Multi Family Apartments
  • Purchase Price: $249,999
  • Financing: $194,600 Local Bank Loan (5.25% 10 years fixed, 20 yr amortization)
  • Down Payment: $55,400 (cash out refinance of his first property)
  • Value Add Plan: Update the units and raise rent
  • Value Add Funding: $50,000 (line of credit from local bank)
  • Pro Forma Financials: Deal Cap Rate was 15%, Cash Flow was 1,761/mo, Cash On Cash Return was 38%; Sold for $649,000 ($400,000 profit)

 

Half Million Instant Equity on 1 Deal

Deal Summary

  • Property: 172 Unit Self Storage Facility
  • Purchase Price: $530,000 ($1,100,000 as-is appraisal at the time of closing)
  • Financing: $430,000 Seller Financed (no payments for the the first 12 months; 6.37% fixed; interest-only payments thereafter)
  • Down Payment: $100,000 (from Protege’s savings)
  • Value Add Plan: Add additional 4500SF of non-climate-controlled units and 13,000SF of flex space
  • Value Add Funding: Private money, Small Business Administration (SBA)
  • Pro Forma Financials: $5,850,000 valuation upon completion of expansion, as verified by a feasibility study

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