Project Description
Property:
102 West 9th Place – 12 Unit Class C Apartment Building in Mesa, Arizona
Issues Prior To Acquisition:
- 25% occupied, no enforceable leases
- Deferred maintenance
- Chronic neglect of building systems
- Apathetic tenant base with no sense of community
DVP Actions:
Repainted exterior, expanded fence line to create backyards, exterior lighting, replaced every air conditioning unit, replaced electrical system, minor landscaping upgrades, and completed interior renovation program (two-tone paint, new flooring in bedrooms, new bathroom vanities, and new appliances at an average cost of $3,800 per unit).
Results:
Complete turnover of tenants and 100% occupancy in 90 days, 30% increase in rents, security deposits achieved, 75% LTV loan attained on a 30 year fixed term. Cash on Cash returns went from 3% when acquired to 14% upon stabilization.
Projected Returns:
22% leveraged Return on Investment, 16% Cash on Cash on a 10-year average. Ahead of proforma.
Purchased for $359,000 in 2010, renovation was approximately $100,000. Current estimated value is $850,000.
