Two weeks ago Park Capital Properties closed on our latest acquisition, a 216-unit apartment complex in Atlanta, GA.
We were able to purchase this property by preempting the competitive bid process and offering hard money on day one. This is not always our first choice, nor is it something we would typically recommend, but for this particular deal, it made sense. It is also an example of how powerful (and necessary) your network can be.
First, let me briefly discuss why we went all-in on day one. We strongly believe this property was a diamond in the rough, and has a lot of potential. For example, the neighboring property is achieving rents that are $200-450 higher per month for their renovated units. Recent area sales are also strong.
This property is also a great fit for our value-add strategy. We are going to implement our own “green program”, which will significantly lower our water usage. We are also going to renovate the units, freshen-up the exterior and signage, and implement better property management.
Essentially, this was a very undervalued property that with a little TLC, has a massive upside. We assumed we were not the only investors to see this, so we HAD to act, and act quickly. And this is where the importance of networks comes in.
We’ve heard that your network is your net worth, and I believe there is a lot of truth in that. Robert Kiyosaki (Rich Dad, Poor Dad author) made this point when he said: “The richest people in the world look for and build networks; everyone else looks for work.” Yup.
This is important because we had a major setback right in the middle of this deal, but we were able to recover quickly because of the network we’ve built.
The setback was that one of our original partners backed out 14 days before closing. In a non-refundable deal, this is major. At this point, my other business partner and I had over $200K of earnest money hard in the deal. But we kept a positive attitude and dug into our network, called several people we felt comfortable working with and found one that was a great fit.
But even prior to this, our network had fingerprints all over this deal. Through commercial real estate events, I had met another person who helped raise equity for this deal (and others), becoming a trusted and valuable partner. Plus, we had a crack Class B and C property management company that would be a perfect fit for this project. So from our network, we were able to build out a great team for this project, and also cover an emergency.
Commercial Real Estate is a team sport. We had some setbacks along the way, but in the end, thanks to our strong team, we were able to overcome significant obstacles. It takes grit and determination, but if you have good contacts to call on, it makes everything easier.
So in closing, you should always be networking with like-minded people. Meet them, talk to them, and find ways to help each other along the way. There are no wrong answers when everyone is making a profit. One of the things I love about real estate is how creative and resourceful it allows you to be.
To Your Success,
Park Capital Properties
ABOUT THE AUTHOR
Bill Zahller is the President of Park Capital Properties and resides in Asheville, NC. As a Multifamily Real Estate Investor and Syndicator, he founded Park Capital Properties in 2016 after 14 years involvement in real estate investment. He works with accredited investors and professionals who are interested in real estate investment, diversification, and financial freedom.
Bill has been flying since high school. His father was a Naval Aviator and Captain for TWA. Bill has been flying professionally for over 25 years, 23 of those at his current company. He has accumulated over 12,000 hours and 7 Jet type ratings. He has also held Instructor, IOE Instructor and NRFO pilot positions with a large fractional flight company. He is currently flying the Global 6000 in a long range mission capacity. This keeps it interesting – one week its Beijing or Sydney; the next Rio or Rome.
Bill is also the founder of the Asheville Multifamily Investor Club. Visit www.ParkCapitalProperties.com for more information.