Integrity • Passion • Excellence

Case Study

Although market tailwinds have been strong, this natural appreciation was only 1 piece of the equation to outperform our projections to the magnitude that we did. Ultimately, we executed on the business plan in a very meaningful way, which was indicative in the valuation gain:

  • 24 units were renovated, which make up 45% of the property in a 1-year period
  • NOI grew 89.5% since acquisition on a trended T-3 basis for refinance NOI ($260,900 to $494,287)
  • Weighted average rent premiums for the property on renovated units grew $367 or 42.9% from in-place rents ($856 to $1,223)

In just over 18 months we were able to increase the value of the property from $4.2M to $9.2M with ~$1.1M of capex. This value increase allowed us to refinance the property and return everyone’s original investment in September…AND reserve cash for any upcoming unexpected needs. The new 10-year 5.05% fixed rate loan also has five years of interest only. This long-term fixed rate debt provides security and stability for the remainder of the hold period while also facilitating consistent and reliable cash flow for the foreseeable future. 

Our updated projected investor returns, (assuming $100k investment) are as follows:

  • IRR: 26-30%
  • EM: 3.16x ($316k)
  • Profit: $216k
  • Target Exit Date: 2030-2032
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