Improvement transaction - Add Value

Improvement Deal - Add Value

Improvement transaction - Add Value

 

Multi-family, transaction criteria add value? So what to look for ??

I've written quite a bit about running a multi-family business.
First we specialize in value add transactions with class c tenants.
What does this mean?
What are the criteria we are looking for in a transaction that we want to enter into and that has a high profit potential?

1. Distress property
Properly managed property, management problems, uninhabited units, loss-of-property, owner-owner dispute or any other reason the seller is under pressure to sell.

2. Cash as is
A seller looking to sell cash rather than through financing.
On the way which assets the buyer will have, it is difficult to obtain bank financing because of the state of the property

3. A renewable area. With big renters.
Looking for an area that has buds for development, new construction, a planned shopping center, branches of big companies like food chains, banks and the like.

Most importantly, the price will be around the 60-70 percent of market value.

What is an add value deal?
This type of deal is actually adding value to a property that is really similar to the Flip deals we are all talking about.
To take a property in problematic state, below market price and add value to it while improving.

So where does one find such a deal?

The truth is that it is difficult to find such deals in the market, so here's where our connections come into play.

How can you find such a deal anyway ???
1. Talk to your team. They are in the field, walking around, hearing. Give them criteria what you are looking for and send them to work.
2. mediators. Work closely with them, be loyal to them, reward them, request that they find such a deal.
3. Management companies. On their way they are the first to know. Be creative, offer them an offer that is hard to refuse if they find a suitable deal.
4. Mail, couriers and the like. Locate a number of couriers who are roaming the area, let them help you locate transactions. They are in the field and see what happens if an asset is abandoned or there is a multi-asset that part of the mailbox is full…

It's not easy to find a good deal.
The next step is once there is a deal to storm it, and get into the contract quickly! As soon as possible!
Once you're on a contract, you actually control the deal.

The next challenges are negotiating with the seller and of course managing the improvement…

About that in the upcoming posts

 

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