Here at Nighthawk Equity, we haven’t done a multifamily deal in 18 months.
So, we were excited to find what looked like an ideal opportunity in Atlanta. And two months ago, we got the deal under contract.
But after spending $15,000 in the due diligence process, we ultimately decided to walk away.
What went wrong?
On this episode of Financial Freedom with Real Estate Investing, I sit down with my partners at Nighthawk, Drew Kniffin and Garrett Lynch, to debrief on the deal we didn’t do.
We explain what we liked about the deal, describing what made it a textbook value-add opportunity and how we planned to renovate the units and upgrade several amenities in the community.
Listen in for insight into the issues we discovered in the due diligence process and learn how to stick to your investment criteria and protect your investors by walking away from a bad deal!
Key Takeaways
What we liked about this multifamily deal in Atlanta
- Affordable housing in growing market
- Value-add opportunity (property built in 1988)
- Price 40% below sales comps
- Large floor plans
How we planned to add value to the community
- Renovate units, clubhouse and pool area
- Resurface and restripe parking lots
- Upgrade carwash station and landscaping
What problems we discovered during due diligence
- Significant square footage discrepancy of units
- Issues with polybutylene piping
- HVAC units at least 20 years old
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Resources
Explore Michael’s Mentoring Program
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Financial Freedom with Real Estate Investing by Michael Blank
