Get Down And Dirty
“How much water are we talking about?”
A lot.
Like, a foot of water in the crawl space. That’s definitely a problem.
I was on the phone with my broker, who was handling the sale of one of our apartment complexes. This was one of the properties we have that has a crawl space. Not unheard of for apartments, but not common either…
Let me back up just a bit though…
The original plan was straightforward:
- Buy the apartments ($2.8mm purchase)
- Renovate them to nicer updated units ($900k of reno budget)
- Release them at regular market rate (rent roll at purchase-$35k/market rent roll-$60k)
- Refinance sell the property, take the profit, and return it to our investors.
Simple, right?
But we all know that plans and reality may take different paths.
The market shifted drastically and we made a pivot. Instead of refinancing, we made the decision to sell. Fortunately, we knew we had that contingency plan open to us because we bought right!
And now we had the property under contract and were moving forawrd.
But…the broker discovered an issue — crawl space issues on some of the buildings.
At that point, I knew it was time to head back on-site. The property was hours away by car, and I hadn’t been onsite since the going under contract, and I needed to see what was really going on.
I scheduled a time to meet the broker there, and honestly? Not as bad as the picture my brain had created!
Water wasn’t draining properly under one building and there was subfloor issues on another. Both problems that could be super easy or incredibly difficult to address. And exactly why I wanted to be onsight.
I grabbed my flashlight and started walking to one of the buildings. I came all this way so I could see with my own eyes what the issues are. I asked the maintenance guy to tap on the floor in the unit so I could follow the sound. I scrambled into the crawlspace and military crawled my way to the tap-tap-tap…tap-tap-tap.
If you have never crawled around in a crawlspace…well…you’re missing out!
Fortunately, this one was good to go. I was able to see exactly what was going on then coordinate with maintenance to get it repaired.
And the water in the crawlspace of the other? We found a small leak, fixed it easily, all good.
Made all the repairs to get everything in shape, and kept moving to closing.
At the time, I didn’t think about this much. When I worked as a realtor, I would go in crawl spaces, attics, dug holes, filled in holes, the list goes on…
It’s just part of making sure a deal gets to the closing table.
But then our commercial broker mentioned something to me.
He was shocked to be onsite and have an owner get in a crawl space. To get his own eyes on an issue like that.
He even mentioned it to the buyer. During my next check-in call with the broker, he told me how the buyer loved hearing that the seller got into the crawl space to personally inspect a problem.
Did that seal the deal?
Well…I’m not saying it was the sole reason, but it sure didn’t hurt! It turned us from just another seller into a seller who genuinely cares about the property.
Long story short? Buyer bought/Seller sold.
We sold the deal, made a profit, and our investors walked away happy. Now, we’re moving on to the next project, already searching for the next opportunity.
If you’re thinking about getting into apartments, what’s stopping you?A year from now, you’ll wish you started today.
Is it work? Absolutely.
Will you need help? Of course.
Is it worth it? Without a doubt, for those who put in the effort.
If you’re ready to get started, let’s talk soon.
