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Multi-family real estate in St. Louis, MO
We purchased a multi-family unit in an all cash transaction in less than 14 days for $30,000, which as at 2021 is appraised at $750,000, resulting in an incalculable cash on cash returns.
- Status:
- Complete
- Occupancy:
- 100%
- Cash out of pocket:
- $0
- Total Project Cost:
- $445,000
- 2021 Appraisal:
- $750,000
- Annual Rental Income:
- $72,000
- Annual Mortgage Payment (include principal paydown):
- $31,200
- Cash on Cash Return (CoC):
- Incalculable
In May 2019, a multi-family unit which had been vacant for the last 5 years was presented to us.
We flew into the city of St. Louis to evaluate the deal and determined it was a viable project because the property was sitting conveniently in the mid-point of gentrification in the south side of the city. We knew holding this play for 5 years will generate both cash flow and appreciation.
We purchased the multi-family unit in an all cash transaction in less than 14 days for $30,000.
Through our deep network, we were introduced to the Senior VP of commercial lending for a local bank in St. Louis, MO. We shared our plans to redesign the multi-family into a 6 units of 2 bedroom 2 bath, a perfect starter apartment for recently graduated working professionals.
We were asking for $360,000 to rehab the multi-family. Like any bank, before they could lend on the project, they ordered an appraisal which came back at $640,000. We were already "in the money" as some will say in the investment quarters. But the icing on the cake was that the bank was willing to lend us a total of 80% of the appraised value, which was $512,000, enough for development and the original purchase cost $30,000. The project is now completed, and is 100% occupied.
Below are some key highlights.