jeffwybo closed on a 76 unit portfolio for $7.925M!
The buildings are a 13 unit building, and three 21 unit buildings. It’s 76 Units.
Jeff put 10% down ($792K, funded through previous refinances and likely his sales commission (more on that below))
Jeff worked with a broker to set up a Syndicate Mortgage (many individuals lending funds that get registered and make up a mortgage). This mortgage has a 10% interest rate, plus lending fees.
He raised OPM (Other People\’s Money) capital for renovations using his brand on IG and YouTube to fund the renovations on the deal. Let\’s assume that was also at a 10% interest rate.
The closings were staggered, allowing more time for financing. Being a realtor, Jeff acted as the realtor on this deal and and negotiated a 196k commission!
Jeff didn\’t specify how much the renovations would cost, but if we assume that it\’s $25K per unit, and he\’s renovating half the units, that\’s about $950K of OPM raised. Assuming the average investor put down $50K, that\’s about 20 investors.
He plans to BRRRR the project within the year because of the 10% interest rate (at least $712K), but he\’s setting himself up to make that back, plus much, much more.
He plans to renovate and raise the rents. He plans to get a 50% tenant turnover via natural means, tenant buy-outs (cash for keys) and evictions.
This is where the numbers start to look good.
Let\’s assume the fair market value in London, ON is about $1300, and the units are currently renting for about $800/mo. He\’s planning to increase the income by $500 across 38 units, so that\’s $19,000 per month, or $228K per year, and that\’s just the increase in rents (not the total rents).
The total income of these properties will be closer to (38*800)+(38*1300) = $30,400 + $49,400 = $79,800 per month = $957,600 in gross income per year.
If we value this 4-building portfolio using, say a 1.5% rule (150*monthly rents), that values the portfolio at $11,970,000! It\’s not difficult to imagine this portfolio selling at that price because it is divided up into 4 buildings.
His expenses will include the renovations of around $1.1M (includes interest), $712K for interest on the mortgage, and possibly other closing costs of say $100K.
To sum up, Jeff is setting himself up for a rough profit of $12M exit sale price – $8M original purchase price – $2M expenses = $2M in profit in one year.
In 2021 Jeff is now BRRRR’ing over 240 units in south Western Ontario Canada.
He\’s here to help and motivate.
Check him out at https://www.youtube.com/c/JeffWybo
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