• John Casmon

Lessons Learned from our 81-Unit Multifamily Deal

Yesterday, we closed on 81-units in Florence, KY. This latest deal sets us at close to $100 million worth of apartments that we’ve partnered on with retail investors - which just means regular people with day jobs. Even with experience, there are always lessons to be learned and principles that get reinforced whenever you do a deal.


The thing that we really liked about this townhome community is the location, unit mix, and upside potential. And while this presented a great opportunity for us, actually getting the deal closed proved more challenging. Nonetheless, through diligence and resourcefulness, we got the deal done. Following the close, we debriefed and highlighted key lessons and insights. While it’s good to acknowledge what you did well, it’s better to identify areas of opportunity. It’s even better when you can learn from someone else’s experience. With that in mind, here are three lessons learned from our latest multifamily deal.

3 Lessons Learned from Our Latest Multifamily Deal


Have a Plan B

Plan A was to buy and hold this property for 7 years. By securing a long-term loan from HUD, we could be patient with our business plan and lock in a low-interest rate for 35 years. However, exiting the property would be more of a challenge as a new buyer would have to assume our loan or pay a hefty pre-payment fee. Despite this, we felt this was the preferred approach, even though our backup plan would provide much more flexibility and control.

As we got deeper into the loan process, we spent more time considering our backup plan. We had heard nightmares of how strenuous the HUD process was, but the seller had a HUD loan and they were willing to wait out the process. And wait we did. HUD asked us to jump through a lot of hoops but after a while, it became clear that this was not going to be the right loan or lender for this deal. Luckily, the deal worked with Plan B, although the change required more dialogue amongst our partners.

Control the Communication to Key Stakeholders

Our second lesson is a classic, overstated cliche, but we want to put a little more context on it. The process began to wear on the seller, broker, and even us. At one point, the broker even suggested terminating the contract. However, by communicating with the key stakeholders, we were able to keep everyone on board with our revised plan and updated timeframe. With the broker’s blessing, we even handled some communication directly with the seller.

Before committing to a different loan, we needed to inform and receive input from our investors. We appreciated the feedback and took their positions into consideration before finalizing our revised approach. Ultimately, we must serve our investors so their interests come first when making these changes. Most people were on board with the revised approach but we did have an investor who pulled out based on the revised loan and business plan.

Build Strong Connections

We expected some pushback from investors when we made the change, but because we engaged them leading up to the decision, we already knew others were looking to increase their investment if space opened up. When the investor pulled out, we had multiple people ready to fill the remaining balance.

Our investors are not just capital contributors. They are our partners and we value their opinion. In addition, we leaned on our team of mentors, advisors, partners, and vendors at various intervals of the deal. I’m grateful for these strong connections and this deal proved how critical it is to have key relationships with industry experts, advisors, and allies.

We’re excited for our investing partners and look forward to helping them get the passive income, tax benefits, and portfolio diversification from investing in apartments. If you would like to learn more about apartment investing, set up some time for us to chat.