Investing in multifamily deals as a limited partner (LP) can often feel like a theoretical exercise or just numbers on a spreadsheet. In this case study, we will examine the Forest Creek project in Atlanta, Georgia, and explore the key highlights, challenges faced, outcome of the project, and lessons learned.

Key Highlights:

• Forest Creek was an off-market deal acquired through a trusted broker, allowing for a better price negotiation.
• The property had a favorable price per door ($56,000) and was located in an area where value-add opportunities were abundant.
• The project was secured with stable long-term fixed-rate agency debt, providing financial stability.

Challenges Faced:

• Staff turnover was a significant challenge, with multiple regional and onsite managers within a year, impacting operational efficiency.
• The COVID-19 pandemic caused rent delinquencies and challenges in evicting non-paying tenants due to government-imposed moratoriums.
• The property’s location in a residential neighborhood limited marketing potential but provided a quiet environment for tenants.
• The large prepayment penalty on the debt affected the project’s overall return.

Outcome of the Project: Despite the challenges faced, the Forest Creek project achieved an annualized return of 15% and exceeded the projected return of 20%. The property was sold within two years, providing investors with a respectable return on their investment. This outcome showcased the resilience of the project and the ability to navigate obstacles while still generating favorable returns.

Are you interested in multifamily investing and want to learn more about becoming an LP investor? Reach out to me today to discuss the possibilities and find the best investment opportunities that align with your financial goals. Let’s start building your real estate portfolio and secure a brighter financial future. Contact me at sarah@hyleecapital.com or visit my website for a one-on-one consultation.

Let’s embark on a journey to grow our wealth together!