Commercial Property Advisors

Commercial Real Estate Coaching and Mentoring

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)

 

0 to 314 Units in 1 Year

241 Unit Deal Summary

  • Property 3: 241 Unit Apartments
  • Purchase Price: $18,800,000
  • Financing: $14,100,000 Commercial Bank Loan (3.85% interest rate, 30 year amortization)
  • Down Payment: $4,700,000 Syndicated
  • Value Add Plan: Hire better management, improve marketing and implement RUB system. Update units as they are vacated and raise rents.
  • Value Add Funding: Cash flow from the property.

66 Unit Deal Summary

  • Property 2: 66 unit Multi Family Apartments
  • Purchase Price: $4,884,000
  • Financing: $3,600,000 Commercial Bank Loan (3.85% interest rate, 2 years interest only payment, 30 year amortization)
  • Down Payment: $1,284,000 Syndicated
  • Value Add Plan: Hire better management, improve marketing and implement RUB system. Update units as they are vacated and raise rents.
  • Value Add Funding: Cash flow from the property.

6 Unit Deal Summary

  • Property 1: 6 Unit Multi Family Apartments, Distressed
  • Purchase Price: $140,000
  • Financing: $210,000 Bridge loan (11.95% interest only payments, 1 year balloon)
  • Down Payment: $42,000 (from Protege’s savings)
  • Value Add Plan: Repair foundation, replace roof and HVAC system, update units and raise rent.
  • Value Add Funding: Original bridge loan

 

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