This property was acquired in November 2021, our 2nd acquisition.
We acquired this property off-market from a long-time owner. The property had major deferred maintenance and non-paying tenants. We set out to resolve all outstanding capital needs, renovate every unit, rebrand and re-tenant the entire property to bring up to market standards.
High-Level Business Plan Summary:
Resolve all exterior and interior deferred maintenance
Full renovation of every unit
Upgrade laundry room
Convert (1) 2 bed unit to a 3-bed unit
Full Rebrand and Re-Tenant
Photos Before:
Photos After:
Renovation & Improvement Scope:
Full Interior Renovation:
LVP Throughout
New Appliances
Painted Cabinets, New Hardware & New Countertops
New plumbing and light fixtures
New In-wall A/C Units
Conversion from boiler to baseboard heaters
Bathroom remodel including shower, toilet, vanity, accessories
Subfloor replacement as needed
Mold Remediation
Removal of overgrown landscaping, new landscaping added
Concrete paths to entry doors
Roof Repairs
Addition of dumpster corral and concrete pad
New Property Signage and branding
Renovated Laundry room with new washers & dryers
Updated all Electrical Panels and circuit breakers to bring up to code
Resolved plumbing leaks and drainage/sewage issues
Obstacles Encountered | Lessons Learned:
Review the Inspection Reports thoroughly - we would have retraded/negotiated a discount had we known the extend of the deferred maintenance prior to acquisition.
Contractor Agreements - we lost ~$30k to a contractor due to improper funding/draw schedules, poor construction agreements, and inspection intervals
Construction Budget - Had we known of all of the capex needs, we would have budgeted far more to complete the business plan. We personally funded the property with the additional capital to complete the work.
Property Management - we used a PM company that had experience with single family homes, but not well-versed at multifamily, resulting in higher vacancy and poor marketing/lease-ups.
Financial Results:
Purchase Price: $775K
Sale Price: $1.25M
Invested Capital: $347,959
Return of Capital & Cash: $460,720
Total Return on Investment: $112,761
Equity Multiple on Invested Capital: 1.32x
Average Annualized Return: 16.20%
We are Focused on Growing Your Wealth So That You Can Do What You Love
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