Financing and partnerships
How We Closed a 144-Unit With a $3.2 Million Capital Raise
Inside our biggest deal yet: an $8.5M, 144-unit LIHTC property in Abilene, Texas, the $3.2 million raise behind it, and why passive income comes from scale.
We closed. A 144-unit deal: my biggest by far.
To date the largest deal I'd ever done was a 76-unit, which was earlier this year. We also closed a 44-unit and picked up a little nine-plex that I added to my Washington State portfolio. This one is a different animal. The capital raise was $3.2 million to close it out, which is the most I've raised by a long way. My previous high was $2 million, and before that $1 million. We had genuinely never tested how much we could raise, and what I found out is that $3.2 million may be very close to my ceiling right now: that's about as much as we were able to bring in.
Related reading: How We Raised $3.45M for a 140-Unit Apartment Acquisition
It took 100 days. We finished the raise about a week and a half before closing. And now I can finally say I've done a $3 million raise and an over-100-unit transaction, the first in five years of doing this.
Here's how the whole thing went down, including the numbers.
The Phone Call: "The Deal Is Too Good"
My good friend Caleb Hommel called me and said, "Hey, I have a deal we have to do."
For the record, I love deals under 100 units. Sub-100 transactions have a whole lot less competition, because you're not fighting institutional money for them. So a 144-unit was already outside my usual lane.
The deal came to us through a relationship we'd already built. We did a 44-unit LIHTC deal in Stephenville, Texas, and the same broker on that transaction reached out with this one. He called Caleb. Caleb called me: "Christian, it's going to be the biggest raise you've ever done, but we have to do it. The deal is too good."
$8.5 million for 144 units.
That's an excellent problem to have. So we drove down, walked the property, and found essentially everything in beautiful condition: the only real issue being a lot of trash on the ground, which we're fixing within the week. We wrote the offer and went under contract.
What LIHTC Actually Means Here
This one is a LIHTC property: low-income housing tax credit. In layman's terms, there are rent restrictions, and we have to lease to people who make 60% or less of the area median income.
There are other requirements attached too. We have to provide a gym, an office, a computer lab, and some other features and amenities. But past those obligations, what we own is a rent-restricted property in Texas.
The economics work well. It'll be about 10% cash on cash. We got a loan at 5.38% interest, which is a fantastic debt product and is a big part of why the cash flow is what it is. It's a seven-year note (the very entry level of long-term debt) and our plan is to extend and refinance at the end of our LIHTC contract.
That contract ending is the whole back half of the thesis. LIHTC doesn't last forever, and we're on the back end of it. When it rolls off, this becomes a market-rate property.
Deal First, Then Debt, Then Equity
Raising capital for a good deal is not actually a hard thing to do. There are lots of people who want to make money in real estate, and there are not enough people with fantastic deals.
So we ran our normal sequence, which I'd encourage anyone to copy: deal first, then line up the debt, then line up the equity. Never the other way around.
We talked to our lender first, and they told us we'd come in under 5.5%. We underwrote conservatively anyway and modeled about 5.6% interest. Ending up at 5.38% meant the deal was slightly better than what we showed investors, which is exactly the direction you want that surprise to run.
The occupancy surprise ran the same way. We were told occupancy was around 90%. It turns out we have 142 of the 144 units leased, so income on day one is notably higher than we underwrote.
And then, after we went under contract: "Oh, we forgot to tell you: there's a 4,500-square-foot retail space on campus." It needs about $45,000 of renovation to get back online, and we're starting that work in five days. Once it's leased, it should bring in roughly $60,000 to $75,000 a year. That's bonus income beyond anything we originally factored into the deal.
So what we have is a property that produces income on day one, has significant upside, and is already in great condition with very little deferred maintenance.
Why We Syndicated This One Instead of Doing a JV
We put all of this into a 15-slide pitch deck and filed this particular deal as a syndication.
I've said many times on this channel that I prefer joint ventures, and I still do. I love investing with other people, but at the end of the day people are variables, exactly the way debt is a variable, and I don't want a lot of variables in my portfolio.
On a sub-million-dollar raise, I'd probably bring in three people at $300,000 each and call that a capital raise. Clean, simple, three relationships.
On a $3 million raise, nobody wanted to bring the full amount. That's a lot of money for one person to have sitting liquid. So we did a syndication, which is where you bring more than five total partners into a deal.
The offer we put together for investors is a blend of current cash flow and future upside, because of that LIHTC contract expiring and the property converting to market rate. The investor profile we attracted is basically: I want to get paid to wait for this building to be worth a whole heck of a lot more. And we're starting from a basis where the valuation is already in a really good position.
Why Abilene: Stargate, an Air Base, and No New Housing
Location is doing a lot of work in this deal.
We're on Old Anson Road in Abilene, Texas. Go a little farther down that same road and you hit OpenAI's data center: the headquarters project called Stargate. It's a $500 billion project. Phase one just completed and added 10,000 jobs, and they're adding 15 more phases like it.
The population of Abilene is going to almost double by the time all the projects coming in are done. On top of that, there's already an Air Force base down the road, and it's expanding with another $100 million project of its own.
And they are building almost no new housing out here.
I'm not great at math, but if you have about the same amount of housing and roughly twice as many people, demand goes way up while supply stays flat. That usually means good things for landlords who own rentals. So we're snagging as much of this market as we can: we're also buying the 81-unit right down the road.
The purchase price works out to just under $60,000 per unit on an $8.5 million buy. We basically stole this campus. It comes with a beautiful office, a gym, a playground, and a pool that's genuinely nasty right now. The pool is otherwise operational and just desperately needs cleaning, so we're restoring it and expect about two weeks to get it running.
If you'd told me back in 2020, when I owned my first duplex, that I'd be buying deals like this within five years, I would have said that was insane. We're right at the five-year mark (almost to the day) from when I bought my first technically multifamily property, two units in Bremerton, Washington. Half a decade later, here's a campus like this.
Passive Income Is a Tax Designation. Passivity Comes From Scale.
This is the lesson I most want you to take from the deal.
I just met some of our on-site staff at this property. There's a building with a gym and a pool and people who work in the office. Maintenance, leasing, all in one spot. This property by itself is essentially an independent company with its own team.
That is as close as you actually get to passive income. Passive income is a tax designation: the work is still real, and it's especially real if you start in small single-family or small multifamily.
I'm not saying start with 100 units. Start with the 12-plex. Start with the 25-unit building. You only need a few successes a year (one, two, three, maybe four deals) and you move forward substantially. Before you know it you're adding 100 to 200 units a year.
Once you own properties with on-site staff and maintenance, your personal input becomes less important. You can't run everything yourself, so you have to build a team. And I have found that managing a team is a far more passive event than trying to manage every building.
The Duplex That Burned Down on the Same Day
Here's the perfect illustration, and it happened the morning of this closing.
I'd been told that day that I was going to own 144 more units. Then, on the drive from Dallas over to Abilene, I got a call: one of my duplexes burned down the night before. A tenant lit a whole bunch of candles. Everyone is safe, which is the first thing that matters, but the building is gone.
So instead of being up 144, I'm up 144 and down two.
That's not great. But think about what that same phone call does to someone whose entire portfolio is five or six duplexes. Some people think that's financial freedom. It's a disaster waiting to happen. There is too much that can go wrong in real estate for your whole business to sit on that few doors.
You mitigate a lot of that (and add a lot of genuine passivity) through scale.
Today I manage a team of people I love working with. I still go on site. I still get in the field, because I love real estate. But this is not actually all that hard, and I make a lot more money doing it this way.
Where This Deal Ends Up
The exit math is the reason we did the raise.
Once the LIHTC restrictions roll off and this operates at market rate, this property should carry roughly a $15 million valuation. That's several years out. But when we go to our exit or our refinance, we will have bought this thing at basically half price relative to where it's going.
That's an exciting place to be standing on day one.
Key Takeaways
- Deal first, then debt, then equity. Good deals attract capital; capital does not create good deals.
- Underwrite the debt slightly worse than your lender quotes. We modeled 5.6% and landed at 5.38%, which meant every surprise ran in our investors' favor.
- Joint ventures stay simpler when you can do them: three partners at $300,000 each beats a syndication on a sub-million raise. Syndicate when no one can carry the ticket size.
- Relationships from smaller deals produce bigger ones. This 144-unit came from the broker on our 44-unit in Stephenville.
- Buy where supply is flat and demand is about to double. Abilene has Stargate, an expanding Air Force base, and almost no new housing being built.
- Passive income is a tax designation. Real passivity comes from scale: enough units to support on-site staff, and a team to manage instead of buildings.
- Scale is also risk management. A burned-down duplex is a rounding error at 144 units and a catastrophe at six.
Watch the full video if you want to see the campus itself: the office, the gym, and the pool we're about to rescue. If you don't know how to get started on deals like this, our free Skool community is linked below; it's thousands of people doing exactly this, and you get the calculator I use on every deal. My mentorship is linked in the description too. Mentees in that program closed $100 million of deals in 2025, and if you add what I closed this year that's another $15 to $20 million on top.
Anyone can do this, in any market, in any area of the country, from any background. That includes you.
Read the episode transcript
0:00 We closed. We just closed 144 unit deal. 0:04 My biggest deal yet by far. Now to date, 0:07 the largest deal I've ever done is a 76 0:09 unit, which was earlier this year. We 0:10 also closed a 44 unit and I bought a 0:13 little 9 flex I added to my Washington 0:14 State portfolio. 0:16 This deal was crazy. And the capital 0:19 raise was $3.2 million to close this bad 0:22 boy out. That is the most I've raised by 0:26 a lot. In fact, the most I'd raised to 0:28 date was 2 million. And before that 1 0:30 million, we'd never actually seen how 0:32 much we can raise. And what I found is 0:34 that may have been very close to my 0:36 limit cuz that's about as much as we 0:37 were able to bring in. We finished our 0:39 capital raise about a week and a half 0:41 ago. It's been a 100 day project. But as 0:44 always for every single deal, we have a 0:46 fantastic opportunity. I'm going to 0:47 share some of the numbers with you here 0:48 on today's video. Fantastic opportunity. 0:52 We have officially closed it. And now I 0:54 can finally say I've done a $3 million 0:56 raise and an over 100 unit transaction. 0:59 First one in 5 years. Here's how it all 1:01 went down. So first of all, my very good 1:02 friend Caleb Hmel called me and said, 1:04 "Hey, I have a deal we have to do." I 1:05 love deals that are sub 100 units. I 1:08 like less than 100 unit transactions 1:09 because there's a whole lot less 1:11 competition. You have less institutional 1:12 money competing with you. This one 1:14 happened to be LITC. Now LITC is 1:16 low-income housing tax credit. 1:18 Essentially, there are rent restrictions 1:21 and we have to lease to people who make 1:22 60% or less of the area median income. 1:25 In layman's terms, that's what LITC is 1:27 for this property. We also have some 1:29 other restrictions and things that we 1:30 have to do such as provide a gym in 1:34 office, provide computer lab, and some 1:35 other features and amenities. But 1:38 overall, we just have a rentrestricted 1:40 property here in Texas. The income on 1:43 the property, it actually cash flows 1:44 quite well. It'll be about 10% cash on 1:46 cash. We got a loan for 5.38% 1:49 interest, which is a fantastic debt 1:52 product and allowed us to really 1:54 increase the cash flow on this. We have 1:55 a 7-year note. So, we have the very 1:58 entry level of long-term debt and we 2:00 have a plan to extend and refinance at 2:03 the end of our LITC contract here. So, 2:05 how this was found is we did some 2:07 smaller deals and of those smaller deals 2:08 is really the 44 unit Litec deal in 2:10 Steamville, Texas that had the same 2:12 broker reach out and say, "Hey, I have a 2:14 deal." He calls my buddy Caleb. Caleb 2:16 calls me and said, "Christian, it's 2:18 going to be the biggest raise you've 2:19 ever done, but we have to do it. The 2:21 deal is too good. $8.5 million for 144 2:24 units that looked like this, by the way. 2:27 It is an excellent, excellent problem to 2:29 have." So, we drive down here, we walk 2:33 the property, we find everything is 2:35 pretty much beautiful, minus the fact 2:36 there's a lot of trash on the ground. 2:37 We're going to be fixing that here 2:38 within the next week. But, we went ahead 2:39 and wrote the offer and went under 2:41 contract. Now, raising capital for a 2:43 good deal is not actually a hard thing 2:45 to do. Why? Because there's lots of 2:46 people who want to make money in real 2:47 estate and there's not enough people who 2:49 have fantastic deals. So, we always 2:51 follow our normal trend. Deal first, 2:53 then line up the debt, then line up the 2:54 equity. We talked to our lender. Our 2:56 lender said, "Hey, you're going to come 2:57 in sub 5 1.5% interest." It's like, 3:00 "Well, that's great." So, we underwrote 3:01 a little bit on the high end. We 3:02 factored for about 5.6% interest. And 3:05 again, we're at 5.38 is where we ended 3:08 up. So, little bit better than expected. 3:10 We were told occupancy is about 90%. 3:13 Turns out we actually have 142 of 144 3:16 units leased. So our income day one is 3:18 going to be notably higher. And we 3:20 learned after we went under contract. 3:22 Oh, we forgot to tell you. Uh there's a 3:24 4.5,000 ft² retail space on campus that 3:28 needs about $45,000 to get renovated and 3:30 back up online, which we are getting 3:31 back online here immediately. So 3:34 renovations are starting on that in 5 3:37 days. And that should rent for an 3:39 additional roughly $60 to $75,000 per 3:43 year, which is going to be awesome. 3:44 That's just bonus income beyond what we 3:46 originally factored. So, we have a 3:48 property that produces income day one 3:49 that has significant upside and is 3:52 already in very great condition with 3:54 very little deferred maintenance. So, we 3:57 put this all into a little 15 slide 3:58 pitch deck. We talk about the deal. We 4:01 filed this particular one as a 4:02 syndication. Now, I've said many times 4:04 on the channel, I prefer joint ventures, 4:06 and I still do. I love investing with 4:09 other people, but at the end of the day, 4:10 people are variables just like debt, and 4:12 we don't want a lot of variables in our 4:13 portfolio. So, on a sub million raise, 4:17 I'd probably bring in three people at 4:19 $300,000 each and called that a capital 4:23 raise. On a $3 million raise, we didn't 4:25 have anyone who wanted to bring the full 4:27 amount. It is a lot of money to just be 4:28 sitting on liquid. So, we did a 4:30 syndication. This is where you bring 4:32 more than five total partners into a 4:34 deal. We we put together an offer that 4:37 was fantastic for them. It's a blend of 4:39 cash flow and future upside as the LITC 4:41 project doesn't actually last forever. 4:42 We're on the back end of the contract. 4:44 This will become a market rate property. 4:46 We have investors who the profile is, 4:48 hey, I want to get paid to wait for this 4:50 building to be worth a whole heck of a 4:52 lot more and we're starting at a basis 4:54 where we're already at a really good 4:55 position with a really good valuation. 4:58 In addition, we're on Old Anson Road 5:00 here in Abalene. You go a little farther 5:02 down the road, Open AAI's data center, 5:05 the Open AAI headquarters called 5:07 Stargate. It is a 500 billion, yes, you 5:10 heard me right, 500 billion square foot 5:13 data center. Phase 1 just completed, 5:16 added 10,000 jobs. They're adding 15 5:19 more of those. The population of Abalene 5:22 is going to almost double when we are 5:24 done with all the projects that are 5:26 coming in. and the air base. We have an 5:28 air force base already down the road as 5:30 well. That's expanding with another $100 5:32 million project. They're building almost 5:34 no new housing out here. So, I'm not 5:36 super good at math, but if [snorts] you 5:38 have about the same amount of housing, 5:40 but twice as many people, what does that 5:42 do to supply and demand? I believe that 5:43 means demand is way up and supply stays 5:45 the same, it typically means good things 5:48 for landlords who own rentals. So, we're 5:50 snagging a lot of this. We're also 5:52 buying the 81 unit right down the road. 5:54 But $8.5 million purchase coming in just 5:57 under $60,000 6:00 per unit. We basically stole this 6:03 campus. Has a beautiful office, gym, 6:05 playground, a really nasty pool that we 6:08 are uh restoring here. Should take about 6:10 2 weeks to get that thing back up and 6:12 running. Just desperately needs to be 6:14 cleaned, but is otherwise operational. 6:16 This is the type of real estate that is 6:18 really exciting to own. If you told me, 6:20 Christian, back in 2020 when I owned my 6:23 first duplex, 6:25 hey, you're going to be buying deals 6:26 like this in 5 years or less, that would 6:29 have been insane. We're right at the 6:31 5year mark. I mean, we're almost to the 6:33 day at the 5year mark when I bought my 6:35 first technically multif family 6:37 property, two units in Breton, 6:39 Washington. Here we are not that far in 6:40 the future, half a decade down the road 6:42 at a campus like this. It is ludicrously 6:45 exciting. I just met some of our on-site 6:47 staff who's going to be working for us 6:48 here, but we have an actual like it's a 6:51 building with a gym and a pool and staff 6:53 that work in the office. This property 6:55 by itself is just an independent company 6:57 with its own on-site staff. We got 6:59 maintenance, we got leasing, all in one 7:01 spot. This is as close as you actually 7:03 get to passive income, which is the last 7:06 lesson I want to share here. Passivity 7:08 is actually done through scale. Passive 7:10 income is just a tax designation. It's a 7:12 lot of work, especially if you're going 7:13 to start in small single family or 7:15 multif family properties. If you want to 7:17 scale up, I'm not saying start with 100 7:18 units, but start with that 12plex. Start 7:20 with the 25 unit building. Only a few 7:23 successes a year, one, two, three, maybe 7:25 four deals a year, and you move forward 7:27 substantially. Before you know it, 7:29 you're adding 100 to 200 units into your 7:31 portfolio every year. And when you have 7:32 properties like this where you actually 7:34 have on-site staff and maintenance, your 7:37 input becomes less important, and you 7:39 can't run everything yourself. So you 7:41 have to build a team. But in that team, 7:43 I have found that managing the team is 7:44 actually a much more passive event than 7:46 trying to manage every building. On my 7:49 drive over here, so I've been told in 7:52 the morning, hey, you're going to own 7:53 144 more units today. On the drive over 7:56 to Abene from Dallas, I get a call, hey, 7:58 one of your duplexes burned down last 8:00 night. Everyone's safe, but a tenant lit 8:02 a whole bunch of candles and burned down 8:03 a building. So instead of being up 44, 8:05 I'm up 144 and I'm down two. That's not 8:09 great. Uh, luckily again, everyone's 8:11 safe. That's the first thing that 8:12 matters. But on a little duplex, that 8:15 could have uprooted my entire business. 8:16 If I was buying small and I had like 8:18 five or six duplexes, some people think 8:20 that's financial freedom. That's a 8:23 disaster waiting to happen. There's too 8:26 much that can happen in real estate. You 8:28 mitigate a lot of that and add a lot of 8:29 passivity through scale. Today, I manage 8:32 a fantastic team of people who I love 8:34 working with. And yes, I still go on 8:36 site to the properties. Yes, I still 8:37 enjoy what I do. I get in the field cuz 8:39 I love real estate. But this is not 8:42 actually all that hard. And I can tell 8:44 you what, I do make a lot more money. 8:46 This deal will be worth about double by 8:50 the end. This should get about a $15 8:52 million valuation once it's at market 8:53 rate, which again is several years in 8:55 the future. But when we actually go to 8:57 our exit or our refinance of this deal, 9:01 we bought this thing basically at half 9:03 price for where it's going to be, which 9:04 is an exciting place to be. So, welcome 9:07 to Avalene. Welcome to the 144 unit. We 9:09 closed. Anyone can do the same thing, 9:11 including you. And if you don't know 9:12 how, join our free school community. 9:13 Link is below. Uh, S K O L. It's multif 9:17 family strategy community. If you're 9:19 just googling it online or just again 9:20 click the link below. Community of 9:22 thousands of people doing the same 9:24 thing. And mentees in our mentorship 9:26 program closed $100 million of deals in 9:29 2025. That's insane. If you count what I 9:31 closed this year, add another 15 to 20 9:33 million to it. That's not a half bad 9:35 year. Anyone can do this in any market, 9:37 any area of the country, any background, 9:40 and that includes you. Hope you enjoyed 9:41 this video.
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