Warrior Wins – Robert Shedden

Warrior Win

Robert Shedden

I am a Project Manager for UPS. I manage on Expansion/Construction Projects for a large shipping company. My wife and I bought our first fourplexes in December 2019 and January.2020. We renovated some apartments and have increase the NOI by 50%. Looking to leave my W-2 by December 31, 2021.

Property Details

Address: 1050 Minns Drive, Machesney Park, IL 61115
Number of Units: 6
Value Add Deal? Yes
Purchase Price: $390,000
Estimated monthly increase projected? $425/unit
Anticipated value after value add: $640,000
Estimated Cash on Cash Return: 21%
Estimated Internal Rate of Return: 19.5%

Warrior team
shout outs:

Any comments about your experience so far in the Warrior Program?

The mindset is by far the most important piece of Multifamily!!

How did you find this property?

Our broker told us it was going on the market in February. We got it under contract for $455,000… then COVID hit. He let it go, joined the Lifetime Cashflow Academy in March, then got it under contract again in July for $390,000.

How did you structure the financing of this property?

The bank is loaning us the purchase price ($390,000) and the full renovation budget ($87,000) at 80% LTV, 5.25% on a five-year term, amortized over 20 years. The first six months is interest-only. We will get the renovation budget reimbursed to us after all renovations are complete and the Chief Credit Officer at the bank conducts a walk-through.

We all loaned the newly formed LLC money and will get a 7% interest on that loan. As managing member, I will get 46% of all cash flow. The other partners will split the remaining 54% proportionally. I only brought $10,000 to the deal, the partners brought $100,000. We will refinance in year three, pay the other partners back their initial investment, and retain control of the cash-flowing property.

How did you raise the equity?

Spoke to lots of Warriors and others in another Mastermind Group I am a part of.

What was the equity raise?

$110,000

What are some hurdles you had to overcome to get this deal done?

A lot! Here are the highlights: We had to let the property go in March. Our broker and the seller were very upset. When we got it under contract in July, the seller found out it was us (again) and almost didn’t sign the contract. we had delays with the financing (loan commitment) and had to file an extension. At the last minute (less than 24 hours before closing) we discovered that three tenants had not paid August Rent. One had not paid since March. We secured a $6350 credit just 20-minutes prior to closing!

What are some of the lessons you learned with this deal?

Demand a T-12 and P&L Statement from the seller. This is challenging on the small mom and pop multifamily properties.

Was This A Joint Venture Or Syndication?

Always have a bigger investor list than you think you should have.

* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.